Chapter 2: The Affiliate Marketing Method
Affiliate marketing is a way of earning a commission.
In the ‘real world’ the idea of being paid a commission is as old as the hills.
Real estate agents, talent agents, loans officers, stock brokers, financial planners, insurance brokers and sales people in every industry are paid a percentage of the sales they generate or deals they broker.
Affiliate marketing is like this, only easier, because all the commissioned workers in the list above have to actually sell something.
Affiliate marketers don’t sell a product. That’s a big difference, but it’s not one most people understand. Online, an affiliate is paid a percentage of revenue they generate when they refer someone to someone else (who’s actually selling products or services).
An affiliate doesn’t have to sell – that’s the vendor’s job.
An affiliate who can influence as part of a pre-sale process has a huge advantage over one who can’t, but at the end of the day the actual selling is done by the vendor.
To make money as an online affiliate there are only two things you need to do:
- Get an affiliate link
- Get people to click your link.
That’s all you need to do.
That’s how simple it is.
Of course, there’s a lot you can do to get the right people to click your affiliate link and get them in the right frame of mind to make the vendors job of selling easier, but at the most basic level, the affiliate marketing equation is:
(Link + Click) x Volume = Commissions
There is no ‘selling’ step in this equation.
The more affiliate links you can get, the more products and services you can promote.
Some links are easy to get. There are affiliate programs and networks you can join without any kind of qualifications. You could get an affiliate link from these programs in minutes.
Other more lucrative affiliate programs are harder to get approval to join.
Once you’ve got a link, getting people to click your affiliate link is your business model.
It doesn’t matter how you do it. There are lots of effective ways that people have tried and tested (and a lot they’ve rejected). At the end of the day, however you do it, as long as you do it, you can make money as an affiliate.
The better your affiliate link is (i.e. the more lucrative and desirable the offer) and the more quality leads you refer (i.e. the more people who want the offer) the more money you can make as an affiliate marketer.
That’s the formula.
So, let’s look at these steps in a bit more detail.
Step 1: Getting an affiliate link
There are either two or three parties involved in an affiliate transaction.
- The affiliate – the party that’s going to promote the product
- The vendor – the party that’s going to sell the product
- The network – a party that can facilitate the relationship between affiliate and vendor
There isn’t always a network involved. Many vendors manage their own affiliate programs. Amazon’s associates program – arguably the internet’s first great affiliate program – is an in-house affiliate program managed by Amazon.
To join a vendor’s affiliate program or an affiliate network you usually have to go through some sort of application process. Some applications are simply a registration. You just provide your personal details and you’re in. Other programs and networks are harder to join.
In order to join some private affiliate programs and networks you have to be able to demonstrate that you already have some authority in the vendor’s market or that you have a proven track record as an affiliate. You might have to provide some kind of proof with screenshots of traffic and campaigns you’ve run, or even have an interview on the phone or Skype.
There are a number of reasons why some affiliate programs are harder to join. It could be because the market is very exclusive or because the vendor want’s to maintain strict control over its brand. But at the end of the day, it almost always comes back to refunds (and in extreme cases, fraud).
Vendors and affiliate networks hate refunds. It’s not good for their reputation and it’s an administrative hassle. Also, some affiliate programs pay affiliates instantly and may not be able to claw back money if a dodgy affiliate generates a bunch of fake sales and then disappears with the commissions and the refunds.
Affiliate networks and programs that allow anyone to join will give you a little leeway at first, but you’ll end up being banned if you generate too many refunds from your referrals.
Here’s a quick list of three of the easier to join affiliate programs and networks I use:
- Clickbank – a pretty big marketplace for digital products like eBooks, private memberships etc. Instant approval is usually granted.
- Amazon – Amazon’s huge in-house affiliate program. Easy to join and easy to get links to promote anything in the store.
- ShareASale – a really good affiliate network for finding offers from all kinds of online retailers and service providers.
If you want to get started immediately, join these three. They’re the easiest to join and offer some good products and services you can promote with decent commissions. You could make a full-time income just promoting offers from these programs/networks.
If you want to read more about affiliate programs and affiliate networks, check out this post by Mahesh Mohan at Minterest.
Let me just mention a couple more things before I move on to the next step.
Different affiliate programs and networks have different terms and conditions. The range of commissions on offer also varies dramatically from program to program. Some pay as much as 100% for a referral, while others are in the single digits. Also, the time period for tracking your referrals varies widely. Some track your referrals for 60 or 90 days or even longer. Others (like Amazon) only track your referrals for 24 hours or until someone makes their first purchase. There are also a wide variety of payment methods and policies available, depending on which network or program you join.
Whatever affiliate network or program you join, make sure you take plenty of time to familiarise yourself with their policies, terms and conditions. Some can be quite restrictive. If you cross the line then you can get your account banned and all your commissions reversed. You should also participate in any training offered by the network or program. These can be highly informative and effective.
Step 2: Getting people to click your link
Once you’ve got an affiliate link, you need to start using it to refer people to the vendor’s website. Links are the roadways between websites on the internet.
You can embed a link on any kind of digital real estate. Blogs, social media sites, forums, directories, videos, photos, PDFs and emails are some of the more common ones.
You could even physically give the link to someone (e.g. print it in a newspaper or magazine ad) or tell it to them (e.g. in a radio or TV commercial).
Regardless of where you end up putting your links, there are three main categories of affiliate marketing models you need to consider. This is because your method is going to end up following one of these models.
I call the three affiliate marketing models:
- The ‘Detached Method’
- The ‘Indifferent Method’
- The ‘Engaged Method’
You can call them what you want, but to me these descriptions help to define the kind of relationship you’ll end up having with the people you’re hoping are going to click your link.
The Detached Method
Affiliate marketers who are completely detached from the people they refer to their affiliate link are basically just advertising the affiliate product on behalf of the vendor. They create ads and pay for the clicks on their links. They make a profit if their ad spend is less than their commission revenue.
The Detached Method can be a VERY lucrative affiliate marketing model if you’ve got a lot of money to spend on advertising and if you can crack a positive ROI. There are plenty of affiliates making $10,000 per day with this method. Of course, you have to spend big money before you can make big money. This means there’s a big financial risk.
When I first discovered affiliate marketing this is the method I learned. Over the years I invested thousands experimenting before I got the hang of it and started to turn things around. I enjoyed this model for a while, but find it pretty frustrating now because it can be an inconsistent way to make money. For this reason, I rarely do this anymore.
Even though there are costs and risks associated with the Detached Method, there are also some definite advantages. Because you’re so detached from the market as an advertiser you don’t have to be an authority or have any kind of reputation. You don’t have to have a blog or a website or a social following. All the credibility you need is a fat advertising account.
I’ve promoted several products successfully as a Detached Method affiliate without knowing much about the market I’ve been promoting to. I knew the product converted well and that it paid well. I knew the problem the product solved. And I knew where to buy the right clicks at the right price. But that was it.
The most common types of advertising used by Detached Method marketers are:
- Pay-per-click (PPC) AKA cost-per-click (CPC)
- Pay-per-view (PPV)
- Cost-per-mille (CPM) AKA ‘media buying’.
Using this kind of advertising most detached affiliates focus on cost-per-action (CPA) and cost-per-lead (CPL) affiliate offers.
Like affiliate programs and networks, some advertising platforms are easier than others to join and there are pros and cons to all the variations.
If you’re interested in learning more about advertising, I’d suggest starting with PPC. It’s the grandfather of all paid advertising methods online. If you’re a complete beginner, take the Wordstream PPC University course. This is a free course and can give you a good grounding in the basics behind PPC and keyword research.
Out of the big players in the PPC/CPC/CPM platforms, Facebook advertising is something a lot of people new to the game learn to manage pretty easily.
LeadPages has a fantastic series of free FB advertising training videos. I learned a lot from this when I was starting out.
I’d also seriously recommend joining the STM forum. It’s a premium forum, but it’s got everything you’ll need to master the Detached Method. If the $99/month price tag is too steep for you to manage long term, join for a month and spend every waking hour reading everything you can.
PPC can be a very effective affiliate marketing strategy, but it’s not for the uninitiated or the fainthearted.
Consider yourself warned!
The Indifferent Method
The Indifferent Method is a hybrid of the Detached Method and the Engaged Method.
In this model you’ll need some kind of online presence, but you don’t have to be an authority or influencer in the same niche as your affiliate product. This is because in the Indifferent Method you’ll rarely actually recommend the products you promote to your audience.
An example of this method in action is where you have a popular blog, fan page, Twitter feed or Pinterest account (or anything along those lines). Then you put a link or banner on your site pointing to an affiliate product. You don’t recommend it, you just link to it. This method is most effective when your affiliate products are relevant to the interests of your following.
For example, if you have a blog about your love of travel, you might have an affiliate link or banner for TripAdvisor.com somewhere on your site. You get paid for referrals if people click the ads, but you’re not actively promoting the product in any way.
The Indifferent Method is really just making money from selling advertising space on your digital real estate.
The Indifferent Method can be a low cost way to make money from affiliate products because you don’t have to pay to buy traffic. You simply leverage your existing audience. You also get the benefit of staying in complete control of the ads that appear on your site. If you’re running AdSense ads or something similar to monetize your site, you generally have to take whatever ads are served for you.
If you’re interested in learning more about how to make money from blogging there’s a lot of info online. It’s kind of a case of information overload IMHO, but I’ve recently been enjoy reading Spencer Haws’ blog NichePursuits and Jon Dykstra’s blog FatStacks.
The Engaged Method
The Engaged Method is where you get personally involved in promoting a particular product to your audience.
There are different levels of engagement you could demonstrate.
At one end of the scale you could include a short reference to an affiliate product in a post on your blog or FB/Twitter etc. This could be something like our travel blogger writing a post about a trip to Thailand. In the post she writes, ‘I found out about the accommodation on TripAdvisor.com.’ Then she simply hyperlinks the domain name with an affiliate link.
On the other end of the scale our blogger could write a complete review of TripAdvisor, including a detailed explanation of how she used it and what she liked about it. At the end of the post she says,
‘I give TripAdvisor.com 4.5 stars and highly recommend you use it when you’re planning your next holiday. Go there now and check it out.”
The Engaged Method is the method of choice for most email marketers.
Most affiliate marketers swear by this method and it’s been tried and tested for a long time.
I use email for virtually all of my affiliate marketing now, so the Engaged Method is my method of choice.
If you want to learn to work the Engagement Method like a pro, I highly recommend Mark Ling’s comprehensive affiliate training site Affilorama. I just can’t say enough about Mark and his training. I’ve been a member of Affilorama for years and I simply love the guy and everything he does in the internet marketing world. You can even get a 30 day trial for Affilorama Premium for just $1.
It’s a no-brainer.