The effectiveness of affiliate marketing is highly appreciated among advertisers and affiliates. Statistics show that the number of queries about this form of online promotion in search engines has increased 20-fold over the past 5 years. This is because it allows for expense forecasting, as payments are made only for completed sales, registrations, or inquiries. The chosen affiliate program determines numerous important elements of your campaign. However, before making a choice, it is necessary to understand all the available options of commodity affiliate programs. In this article, we will discuss affiliate programs, their advantages and disadvantages, as well as the topic of choosing affiliate networks.
What is an affiliate program?
The affiliate program is a form of cooperation between affiliates and a seller, in which the company rewards one or more affiliated individuals for each sale or referred visitor. Such a program allows companies to reduce expenses on customer acquisition, increase online sales, and enhance brand recognition. Affiliate programs are developed and promoted directly by advertisers, which means that there are no intermediaries between them and affiliate marketers.
Depending on the type of compensation, there are several types of affiliate programs:
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CPS (cost-per-sale), or payment for sale. The affiliate receives a reward after the buyer attracted by them makes a purchase from the advertiser. The reward amount is a percentage of the sold item. In this model, there are requirements for the advertiser: they must have their own target website, the product must be in demand among a wide audience, and be sold exclusively online.
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CPA (cost-per-action), or payment for action. Commission payment is expected after the user referred by the affiliate performs a specific action. Such actions can include registration, filling out a feedback form, subscribing to a newsletter, or downloading a program. In this type of affiliate program, advertisers do not need to search for users or websites to place ads. The entire work is taken care of by the CPA network.
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CPC (cost-per-click), or payment for clicks on an advertising banner, which the advertiser pays to affiliates who attract users to their website. This metric is influenced by keyword competitiveness, region of display, ad characteristics, date and time, and the relevance of the landing page to the ad.
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CPV (cost-per-view), or payment for one view of an advertising video. Most often, this metric only takes into account views from the beginning to the end of the video. Tracking CPV is necessary for optimizing advertising campaigns and collecting a database of interested users.
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CPI (cost-per-install), or payment for the installation of a mobile application. It specifically considers the download of the application, not just clicking on a link. The CPI model is one of the simplest ways to get conversions and is used by both beginners and experienced affiliates.
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Multilevel marketing is based on creating a network of independent sales agents, each of whom is responsible not only for selling products, but also for recruiting affiliates. A multilevel affiliate program represents a hierarchical network of referrals and subscribers. In other words, the benefits that the recruited users receive are reflected in the income of the one who recruited them.
Advantages and disadvantages of affiliate programs
Affiliate programs for affiliates are gaining popularity due to a number of advantages. They are easy to set up and require minimal resources. With the help of affiliate networks, companies can quickly increase their brand recognition and reach, as well as generate additional income.
affiliates, in turn, can establish individual relationships with advertisers and some may even receive special support lines. Moreover, affiliates often have access to branded advertising materials and large networks of potential customers, allowing them to reach even more people than with traditional advertising methods. Deals in affiliate programs can also become the subject of contracts.
However, there are some nuances when it comes to using affiliate programs. Companies sometimes find it difficult to find reliable affiliates who can provide quality traffic and conversions. Since most programs only offer basic tracking capabilities, it can be challenging for businesses to accurately track results. Additionally, the choice of niches for an affiliate program is limited, and it is necessary to choose the one that is most closely related to the product.
Definition of affiliate networks
An affiliate network is a platform that acts as an intermediary between advertisers who want to promote their products and affiliates who have resources for advertising these offers. Affiliate networks provide affiliates with access to various types of goods and services from multiple sellers, which simplifies the process of finding suitable offers. In turn, sellers do not need to spend time searching for new affiliates, as the affiliate network itself looks for them. Many affiliate networks, in addition to organizing partnerships, offer additional services such as analyzing the effectiveness of advertising, tracking of target actions, analyzing the performance of affiliates, excluding dishonest contractors, and creating advertising materials if necessary.
Not all companies are suitable for working with affiliate networks. Such a platform will be relevant for businesses that deal with the production of a product with a wide geographical distribution and have a competitive price. This applies to online stores, platforms with online games, bookmakers, travel agencies, booking services, and online learning websites. At the same time, a COD affiliate network is not suitable for B2B companies and those who sell niche products. Before choosing and starting cooperation with an affiliate network, it is important to verify its integrity and establish special protection for your website to prevent fraud.
Advantages and disadvantages of affiliate networks
One of the reasons why many affiliates avoid direct collaboration with advertiser affiliate programs is the complexity and lengthy search for the optimal option. Therefore, preference is given to collaborating with affiliate networks.
Among other advantages of affiliate networks, the following can be highlighted:
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The ability to quickly and efficiently connect sellers with potential affiliates;
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Time and cost savings that would otherwise be spent on manually searching for suitable candidates;
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Access to a wide range of products and services from different sellers in one place, increasing the chances of finding something suitable;
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Most networks offer additional services such as payment processing and performance tracking to better manage their campaigns;
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Guarantees of security and other technical aspects;
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Availability of various pricing models;
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Special support for both sides of the collaboration.
However, the downside lies in the cost and competition. Many affiliate networks charge either a monthly fee or commissions based on percentages, depending on your agreement. Therefore, this factor should be taken into account in advance before making a decision to join a network. Keep in mind that due to competition, quality traffic is not always guaranteed.
Conclusion
The choice of individual affiliate programs or affiliate networks depends solely on you. In the first case, you work directly with companies that are more demanding and prefer to have control over the situation. But that's not always a bad thing. It can mean that affiliates receive better marketing materials. As for affiliate networks, they operate like virtual marketplaces where thousands of advertisers are listed. Each of them offers their own terms, which means that affiliate marketers can choose offers and niches they want to work with. Additionally, affiliate networks are characterized by a simple application process, the ability to promote multiple verticals, and assistance in ensuring reliable affiliate partnerships.
