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Everyone knows that getting started with any business is tough work.
You need every bit of extra revenue you can get. One way to generate that extra income is through affiliate marketing. This is an approach based on revenue sharing; basically, you advertise someone else’s product or service, and receive a share of their profits if it happens to lead to a sale. Or, you employ others to advertise your products or services, generating wider reach and visibility as you do.
Affiliate marketing has been around for a long time. But is it still effective in 2020? Well, like the ragged Clint Eastwood in Unforgiven, coming back into the cowboy lifestyle for One Last Job, there’s always the fear that the world has moved on. You might not be the terrifying gunfighter you thought you once were. So are affiliate links effective? And if so, just how important are affiliate links?
via Giphy: Clint with his trusty affiliate, the double-barreled shotgun.
What Are Affiliate Links?
First of all, some background. How do affiliate links work?
They’re part of something known as affiliate marketing, a broad term that refers to earning a commission from linking to other products or services from your site. In this case, you are the affiliate to the bigger business. The reverse of this is when you are the business and you employ others to market for you.
Affiliate links specifically refer to the unique URLs assigned to a particular affiliate. If you’ve ever bought something online (and there’s a good chance you have), then you probably bought it through an affiliate link, and chances are you didn’t even realize it.
Affiliate marketing is a potentially great source of passive income for affiliates and a fantastic opportunity for businesses—at least, that’s how it’s supposed to work. But is that the reality in 2020?
Is Affiliate Marketing Still Relevant?
Affiliate marketing saw rapid growth throughout the 2010s. And the good news is, it looks like it’s here to stay. Affiliate marketing is set to see continued growth in 2020, with the industry as a whole projected to be worth around $8 billion by 2022, according to Forbes. This is serious money. It suggests that there’s never been a better time to get involved with affiliate links. It’s one of the most effective ways to earn an income using your computer, and is seemingly highly beneficial—whichever side of the line you’re on.
So, why has affiliate marketing been growing so much in recent years? Well, largely because of the rise of social media influencers. Bear in mind that this job title didn’t exist a few short years ago. Now, influencers are one of the most significant forces on the internet. As they continue to consolidate their power, they will undoubtedly become the perfect conduit for affiliate links.
Pros and Cons of Affiliate Links
Despite this projected growth, there are some downsides to affiliate marketing if you’re a business looking to employ affiliates. We’ll run through the pros and cons of going down the affiliate link route for your e-commerce business.
Pros (How to Optimize Affiliate Links)
The most significant advantage of affiliate marketing is that it’s performance-based. Affiliates only make a commission in relation to the desired action taking place, i.e. getting people to your site or buying your product. This means you’re not shelling out a lump sum at the top, and you can easily keep track of your sales to see if it’s providing a strong return on investment.
You can boost your reputation by partnering with trusted affiliates, bloggers, influencers or other reputable websites. In Unforgiven, Morgan Freeman comes to Clint because he doesn’t want to ride alone. He wants the most fearsome gunfighter of the Old West by his side, because his reputation precedes him. Whether ol’ Clint still has it or not is another matter altogether, but his legend certainly looms larger. (Spoiler: he’s still got it.)
You can broaden your audience with affiliate marketing, as many affiliates will come with their own viewer base. Essentially, looking at the whole thing as a partnership is a good way to visualize the potential benefits. You want to partner up with affiliates that have an established core support system, so you know your message is going to be seen and heard.
Affiliates can often be fair-weather friends. You’re not buying their loyalty, and they will move away from you if they don’t see a strong return. This is the downside of the performance-based income strategy. Influencers and bloggers like to stay trendy. They may be infatuated with your product or service for a while, but will soon move on to the Next Big Thing unless you’re making them heaps of cash.
You also aren’t in full control of how affiliates put your brand across. You can certainly suggest the ways you want your product or service to appear, but at the end of the day, it’s up to the affiliate. Remember, you are not employing these people, as such. You are partnering with them. The distortion of your brand image is usually not malicious, but due to affiliates not putting as much care or attention into your business as you would. Be sure to communicate openly and assertively from the outset to avoid this.
Finally, your bottom line can take a hit. This is an unavoidable consequence of the affiliate model. You pay affiliates a commission based on traffic. Not all of these site visits will convert into sales, which means you’ll still be paying out without getting anything in. Dishonest affiliates can use a variety of tools and tricks including SEO, fake marketing, and fake coupons to compel people to visit your site without buying. Not all affiliates are underhanded like this, of course, but it’s something to be aware of.
via Giphy: Clint has no idea about affiliate links. That’s why he’s broke.
Clint didn’t have to deal with the complex world of affiliates. He only needed one single affiliate: his Colt revolver.
At the end of the day, affiliate marketing is a growing sector that could prove hugely beneficial to your business. Just make sure you’re aware of all the pros and cons before you sign them up.