What is Affiliate Marketing? The Complete Definition, Example, and Beyond

What Is Affiliate Marketing?

Affiliate marketing is an advertising model in which a brand leverages the traffic generated by third-party publishers on social media, websites, and other digital paltforms. These third-party publishers, referred to as affiliates or affiliate marketers, promote the brand’s products/services. In return, they get compensated by the brand for their contribution to driving sales.

Affiliate marketing follows a pay-for-outcome or cost-per-action model. The brands typically pay their affiliates per sale. However, some firms may also pay per click or impressions.

More About Affiliate Marketing

Did you know the idea of affiliate marketing has its roots in the offline world and was explored before the Internet? Consider the instance of a mechanic or other service professional giving you a discount for every referral you give that results in a new customer for them. This is the simplest instance of affiliate marketing in the real world.

With the advancement of the Internet, this marketing strategy evolved as a widely adopted business model. The rise of digital marketing and analytics has made it a multi-million-dollar industry. Currently, 15% of e-commerce revenue is attributed to affiliate marketing.

So, what is affiliate marketing? This advertising model on social media and other platforms involves individual or affiliates advertising brands by running banner ads, posting links on their social media, publishing articles, videos, and images, or sending emails to clientele.

Social media platforms offer higher conversion rates and also increase brand awareness. Due to these factors, affiliate marketing programs on the platforms present a win-win situation both for businesses looking to increase their online presence and affiliates seeking steady income.

Instagram stories are perfect for affiliate marketing as they have over 500 million daily users. As an affiliate, you can use the link sticker in Stories to direct people to the product. This approach differs from posts, where you have to place the link in your bio.

Affiliate marketing can be classified into the following types:

Unattached Affiliate Marketing: The affiliate has no connection to the product/service they promote. They do not make claims about its use and hold no related expertise.
Related Affiliate Marketing: The affiliate has a relationship to the offering. Their expertise in the niche makes them a trusted source of information, which in turn helps generate traffic. However, the affiliate makes no claims of the product/service use.
Involved Affiliate Marketing: The affiliate has a strong connection with the product/service they are promoting. Either they are using or have used it and are confident about the positive experiences.

Affiliate marketing on social media is pretty easy. However, to see success, the advertising model requires you to know your target audience and what intrigues them.

See the example below for an affiliate marketer’s profile on Instagram advertising Amazon products:

Frequently Asked Questions

What is the affiliate marketing model?

Affiliate marketing is an advertising process through which an affiliate marketer earns a commission when they promote another person's or company's services/products, and the audience makes a purchase through the affiliate's link.

How does affiliate marketing work, step by step?

The key steps involved in affiliate marketing are as follows:

The affiliate gets a referral link from an affiliate program.
They create click-worthy content and post it on their chosen platform, which could be a website or social media channel.
The affiliate inserts the link in their content and pushes their audience to go for the product/service.
For every instance of the audience clicking on the link and making a purchase, the affiliate gets a fixed commission on the sales price.

What social media platforms are the best for affiliate marketing?

Due to its large audience, Facebook has acquired the top position on affiliate marketers’ lists of preferred platforms. YouTube and Instagram follow in popularity as they foster quick engagement and easy interactions. The handiest tip to becoming a successful affiliate is to opt for platforms where your target audience spends most of their time browsing.

What are the benefits of affiliate marketing?

Affiliate marketing benefits both content creators and brands. The pros of this advertising model include

Low risk
Low cost of starting up
Possibility to start with no investment
Low ongoing costs
Better accounting of qualified leads
Targeted traffic
High ROI

How much money can you make as an affiliate marketer?

The income of an affiliate marketer can vary from a few hundred dollars to six figures, depending on the niche, their influence as a marketer, their reach, and the time invested in marketing products. The average income of an affiliate marketer in the US is $70,500 per annum.