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What the #$@!% Is Affiliate Marketing?

You’ve probably heard about affiliate marketing, but think it sounds too technical, confusing or even irrelevant. In today’s world of rising marketing costs and disrupted ad targeting, it is anything but. Thanks iOS14!  Affiliate marketing is actually a natural evolution of digital marketing, media and commerce which every brand needs to explore to attract and win more customers. If done correctly, affiliate marketing should produce greater Lifetime Value (LTV) per consumer at a lower Customer Acquisition Cost (CAC). Here’s why.

Affiliate Marketing–Defined 

Affiliate marketing is nothing more than working with digital publishers large and small to feature your product and link back to an e-commerce site or page. The publishers, from the New York Times to micro-influencers, generally take their cut when a sale is made. So it works for brands and businesses. Unsurprisingly, it’s become an increasingly popular channel with affiliate marketing spend growing 10.1% annually since 2015 (trulist). 

Affiliate Marketing Networks

How do you find these partners? In most cases, the best bet is to start with an affiliate network, such as Impact, Rakuten or ShareASale, to name a few.  The networks let you choose affiliates whose content and style fit your brand, product or service. Affiliates then create news and review content about your product and brand tailored for their audiences–often highly curated communities more likely to engage with the brand and buy than those you could reach with broader social media campaigns. 

In some cases, affiliates with larger platforms may charge an upfront fee as well as a commission because of the guaranteed exposure to such ideal audiences. If the platform is a match with your brand, it can be an effective way to drive traffic to your site and deliver a higher conversion rate.

Influencers as Affiliate Marketing Partners 

Affiliates are more than just content platforms. Many are individuals: influencers, reviewers and others with idiosyncratic voices and compelling lifestyles shared across the digital and social web. For these relationships to work for a brand, the influencer or critique must be able to make an authentic and engaging pitch for your mission and product. It has to feel real. That’s what truly drives conversion and lower cost-for-acquisitions. Remember: affiliate is a channel that should reduce your CAC and drive LTV in a world where costs are rising and targeting is declining.

Why Authenticity Matters More than Celebrity

Take Jennfier Aniston. She’s a brilliant pitchwoman and a beloved personality. But when you see her promote many products, you wonder… What are her motives? Does she really believe in a product, such as Aveeno? While we all wish we had her skin, is it really because she uses Aveeno? Can we be confident it’s part of her daily routine? The answer is, we don’t know for sure, and the message is too mass market to allay our doubts. It’s really an expensive brand campaign. 

While certainly a valid strategy, the campaign costs put it out of reach for most growing brands. When done well, affiliate marketing produces an opposite, cost-effective and powerful impact. Say you’re scrolling through Instagram, watching the lives of influencers you’ve been following for years. You know about their day to day lives, families and values because they choose to share it all with their audience. They are almost like friends. They have authenticity. 

When they are actively using a product, explaining why it’s part of their routine, and providing a link and a discount code, you’re simply much more inclined to click and buy this product immediately. “Since April 2020, more than 30% of online shoppers who made their first purchase from a brand used an affiliate link” (Awin, 2021).

Which Sounds Better Financially for Your Business?

Hiring an entire team that you would pay hourly/salary/benefits to create content, build your brand and scale your business… or … Hiring a handful of affiliates that you would send free products to with a commission code to create and promote your content for you? 

You decide… 

Are You Ready To Start?

Our hope is you now have a better understanding of what affiliate marketing is, why you need it and feel more open to implementing these strategies for your business. Not quite ready to manage it yourself? Contact us at shelby@redkrypton.com

 

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