If you attend the Affiliate Summit West conference in Las Vegas next January, you will be among the 6000 participants from more than 70 countries. At some point, you may ask yourself, "Who are these people?"
The answer is that they are all digital marketers, networking, and looking for new ways to grow in 2018. They will talk about some aspects of affiliate marketing that you're going to have. 39, have never heard of it.
At the end of the day, you'll understand how important this industry is and how many affiliate marketing models exist. Conferences like this one expose you to different opinions and strategies that help you refine your business.
In this article, I will describe the two main methods of offsetting affiliates – the cost per sale and the cost per share – and the communities that exist around each. I will also talk about three important affiliate segments: niche promoters, mega influencers and Amazon Associates.
Cost per sale
My main focus for the past 12 years has been the cost-per-sale side of the industry. That's what I usually write here on Practical Ecommerce. The affiliates I work with are bloggers, influencers, reviewers, data feed users, coupon makers, and general sites that rank well in search engines with evergreen content.
Cost-per-sale traders are small and large online retailers with multiple channels. Sometimes they have brick or mortar stores or catalogs that have been around for decades. They pay affiliates a commission based on the final sale of the product.
It's up to affiliates to determine how they will monetize. Many of them will switch to different models and eventually choose the most effective method for their audience, their means and their talents. Some want to earn money immediately and others who would be happy with passive income each month.
Cost per action
The cost per share of the industry – the CPA – is changing rapidly and is very competitive. These are the resourceful, the risk takers who will spend money to earn money.
The veteran of the industry, Ian Fernando, talks about days when he would spend $ 8,000 for paid ads in the search engines to earn $ 9,500. He had to stay at the forefront of trends and analysis because an increase in the cost per click could result in a huge loss in a few hours. The goal, at the end of the day, was to have more good hours than bad ones.
Fernando has now switched to white label products. He buys physical products and finds affiliates with the right public to promote subscriptions or essays for them. He went from affiliate to merchant but stayed in the CPA niche. He lives overseas and leads global campaigns, as do many of his CPA colleagues.
There are thousands of entrepreneurs like Fernando and hundreds of networks and agencies specializing in CPA affiliate marketing. These offers are usually lump sum payments for sales, leads, registrations or installations.
Kris Trujillo, owner of CRM BlackBox, a marketing agency, says sales and testing of cannabis products is a hot market. These are not the typical products offered by merchants at cost per sale, but they mean fast money for affiliates with good traffic.
Trujillo stated that cannabis affiliates are targeting older demographic groups in search of pain management. As long as states continue to go ahead with the legalization of marijuana, this hot market will likely continue.
Other markets are doing well: dating, travel and mobile games. Ten years ago, there were mortgage leads and ringtone downloads. Affiliates at cost per action must adapt to changing markets or have no income.
Cost-per-share affiliates must adapt to changing markets or have no income.
Another subgroup of affiliate marketing specialists specializes in promoting products for specific business niches. The best affiliates for these categories have integrated communities based on their expertise in certain areas.
The CJ Affiliate by Conversant network has 120 niches in the business category, including web hosting, business loans, and domain registrations. ShareASale, a similar affiliate-marketing network, has 129 programs listed in the category. The right affiliate can provide strong recommendations to these products and services. Affiliates can significantly influence consumer decisions.
Lon Naylor, from Learn Camtasia, is an example of a successful affiliate. Learn Camtasia offers training and tools for this software. Naylor is a video marketing coach. He said that he earns 43% of his income through affiliate marketing. His community recognizes him as an expert and responds when he introduces them to new products. In some cases, when referring customers to monthly subscription services, it benefits from ongoing payments each month for that customer's life.
Affiliates like Naylor also use networks – such as JVZoo and ClickBank – that provide easy access to authors and business owners with ebooks, video guides and training materials in thousands of categories different products. Consumers can learn how to select a digital camera or how to play the piano, for example.
"Mega influencers" usually have specialized expertise and maintain relationships with opinion leaders, such as keynote speakers and successful authors. Mega influencers can have hundreds of thousands of subscribers, who sign up for more information through email newsletters.
These e-mails sometimes deal with offers from leading opinion leaders, who collectively exchange e-mail lists on occasion and pay each other commissions based on sales. Getting an agreement with any of these mega-influential affiliates could change the deal, but there is never any guarantee.
The majority of affiliates focus on the Amazon Associates program, launched in July 1996. Commissions are limited compared to other cost-per-sale programs, but since there are more than 60 million core members and that they have access to millions of products, the conversion is usually stronger.
Buyers only want paper towels but end up spending a lot more on Amazon. This benefits affiliates, but they still have to analyze what works best for them: higher commission percentages with a little work or lower percentages with minimal effort.
There are still other models of affiliate marketing. Be aware of different opportunities and creative promotions when considering options. Attend conferences and learn more about what affiliates can do for your brand and the most appropriate types of affiliates.