What Are Affiliate Programs And How do They Work?

We live in a time where highly specialised businesses have arisen. These businesses allow others to outsource certain functions of their own business to those more experienced. This often comes with an array of benefits and allows businesses to focus their resources on more important aspects. The same concept can be seen in affiliate marketing programs.

An affiliate program is a marketing strategy whereby a brand, known as the affiliate company, partners with a third party to help generate leads and sales. The third party is asked to advertise the company’s products or services in return for an agreed upon compensation. There are multiple ways that a product or service can be advertised, some ideas include writing blog posts or posting a special link to the affiliate company’s website. The goal is to have potential customers click on a link to the affiliate company’s website and engage or make a purchase.

Thereafter, the third party is compensated according to agreed upon terms. The typical forms of compensation can be based on the number of clicks, leads, or sales generated.

Affiliate marketing has become immensely popular, and for good reason. Current research shows that 83% of marketers use affiliate marketing to increase brand awareness and engage existing customers.

Benefits of affiliate marketing

Low start-up costs

Seeing as the affiliates are responsible for creating content and driving traffic, the company will not have to put together a marketing team or invest financially. Essentially, the initial cost will be the time spent selecting and vetting potential affiliates.

Flexibility

Based on needs, the affiliate company can either scale their affiliates up or down. In addition, the company can decide to explore different audiences without having to invest in the initial set up.

Enhances social proof

Today’s retail environment is extremely competitive, meaning that consumers become less trusting of certain marketing tactics. As a result, consumers look to reviews and recommendations. In fact, 80% of consumers value reviews as much as personal recommendations. That is why affiliates prove helpful. Affiliates may have good rapport with their audiences which will act as reliable social proof for your brand.

Reach a broader audience

Affiliates will have access to audiences that may have been difficult to reach otherwise. By utilising affiliates channels, brands can expand their brand awareness whilst saving valuable resources.

Although affiliate programs have great potential, they are not without challenges.

Challenges with affiliate marketing

Finding the right partners

Finding the right affiliate is challenging. Both parties need to benefit from the arrangement and should be better able to achieve their respective goals. Moreover, each party should ideally have shared values and trust to allow for a faithful partnership.

Maintaining brand integrity

As marketing is not handled directly by the company, it is possible for the brand image to become distorted. If an affiliates marketing is not aligned with the brand, it may confuse the audience and create negative associations. A clear-cut solution is to create a brand guide that outlines how affiliates should structure their content and messaging.

Changes in social media

Social media has adapted quickly over the years. Now, social media platforms are consumed by adverts and sponsored content. This makes marketing on platforms more competitive and therefore challenging. Before, marketers could reach their audience organically but social media algorithms have made it nearly impossible. If looking to succeed, brands must invest in paid advertising which can prove costly.

Affiliate marketing can take many shapes and forms, not all successful. And although many companies have jumped on the bandwagon, there are others such as Takealot that have held back. Whether or not companies make use of this tactic depends entirely on their needs and niche. Let’s have a look at some of the most successful affiliate programs in South Africa.

Examples of affiliate programs in SA

Travelstart

Travelstart is a leading platform for finding the best deals on travel, recreation & leisure. According to affiliates, Travelstart offers hands on support, performance tracking tools, and joining the program comes at no cost to the applicant! When it comes to payouts, Travelstart is hassle free! Depending on the agreement, affiliates can be paid daily directly into their bank account.

Travelstart Affiliate Program

So how about the earning potential? Well that depends on the number of bookings you can generate, domestically and internationally.

Commission Earning Potential

Amazon Associates

Amazon Associates is one of the largest affiliate programs in the world, and rightfully so! The platform has over 300 million products and ships to over 100 countries worldwide. Anyone with a website or app can submit an application for free but the application will only be reviewed once three sales have been made within the first 180 days.

Amazon Associates

Seeing as there are millions of different products, Amazon has based commission on product categories.

Amazon Commission Rates

In summary

Affiliate marketing is not ideal for all, but there are those that benefit greatly. Whether looking to earn passive income or grow your business, affiliate marketing can help. When the right partnership is formed, both the affiliate company and affiliates can benefit mutually. The partnership can facilitate sales, brand growth and social trust.

Now that you know more on affiliate marketing programs, see this article on how to get started!