Affiliate Marketing 101: A Breakdown For Beginners

When I started blogging six years ago, I dove right into affiliate marketing without knowing what the heck it was all about.

I would visit other websites and they'd have all these ads splashed on their pages and they'd talk about how easy it was to make money that way. I thought to myself, "I want to do that too." So I did and it was an epic fail!

We live and learn, right?

Anyway, I finally got the hang of this affiliate marketing thing. Believe me there is more to it than splashing ads on your website.

If you're just getting into affiliate marketing, this post is going to give you a breakdown about it, the different ways to promote products and help you understand the different ways you get paid.

Are you ready? Let's start with what is affiliate marketing.

What Is Affiliate Marketing

Wikipedia defines affiliate marketing as a type of performance-based marketing in which a business or brand rewards their affiliates – that would be you – for each visitor or customer brought by your marketing efforts.

Basically it's a marketing system in which you get paid for referring your visitors to a brand or retailer's website.

Now, if you're going to be an affiliate, here are a few terms you should become familiar with.

A merchant is also known as the retailer or brand. They are the ones whose products you would be promoting.

The network is the 'company' in which you would find the retailers and brands to promote. They are also the ones who handles the offers, provides you with the tools to promote the products as well as payments.

And finally, you will be referred to as an affiliate or publisher.

The Benefits of Affiliate Marketing

There are several reason why a lot of bloggers become affiliate marketers and it can benefit you, too.

For one thing, you can earn a passive income as an affiliate.

There is no limit to your earnings potential.

As an affiliate, you don't have to worry about products or customer issues.

And you don't need to have any special skills. All you need to know is basic HTML to copy and paste codes to your website.

How To Promote Affiliate Products

The most common way to promote an affiliate product is by placing a banner on your website like the screenshot you see below.

But there are other ways you to promote them.

You can promote products in a blog post, product review or a product comparison post. You can create a course or tutorial, promote it in a tools and resource page on your site or promote it in a "best of " blog post like the one I did called Blogging Tools Every Blogger Should Be Using or in your newsletter.

Understanding How Affiliates Get Paid

There are several ways affiliates are paid and here's a quick breakdown of what those are and what they mean.

Cost Per Action

CPA programs pays you when a specific action is taken by one of your visitors like clicks, impressions, sign-ups, registrations or opt-in. In this program you don't get paid for direct sales and the payout rates are lower than a CPS.

And speaking of CPS…

Cost-per-sale

In a cost-per-sale (CPS) program, also known as pay-per-sale the affiliate is paid when a customer follows an affiliate link and makes a purchase. Although there is a potential to earn a high commission, this program usually has the lowest conversion rate.

Pay-per-lead

In this program, affiliates are paid, provided the action is within the guidelines of the affiliate agreement, when a customer completes a certain action like completing a sign-up form for a newsletter, for a product trial offer or other action chosen by the advertiser.

Click-through rate

The easiest way to earn money as an affiliate is when you're paid by CTR or click-through rate.

A CTR is a percentage used to measure the effectiveness of an advertisement or other link on a web page, obtained by dividing the number of clicks on the link by the number of times the link was viewed.

The click-through rate is calculated by taking the number of clicks on a link or banner divided by the total number of page views on your site, multiplied by 100.

For example: You had 500 clicks from a banner ad, your total page views was 15,000. It would look like this:  500/15000 = 0.033 x 100 = 3.333. Your estimated earnings would be $3.34. Still, be sure to read the terms and conditions of the affiliate network you sign up with for their pay conditions.

While that doesn't sound like a lot, if you promote affiliate marketing the right way, you can make good money.

Make Sure You Promote Relevant Products

You have to make sure the products you promote are relevant to your community and to your niche. It's tempting to fill your pages with all kinds of ads. I can definitely understand, after all, your goal is to make money. But a couple things can happen with that.

Your readers can become overwhelmed with the ads and blog post for products they don't have a need for. So they leave, and never return. For example, if you have a fashion blog and you have ads placed for computer software products the chances of your visitor clicking on that ad are low to none.

Depending on the type of ad (video or moving graphics), it can slow down your site's load time. And as you know that's a hot topic right now.

Learn From The Experts

I didn't learn about affiliate marketing on my own. I followed great bloggers who took the time to share their experiences and showed their readers the ins and outs of affiliate marketing.

You might remember I interviewed Donna Merrill this year and she shared some great blogging advice with us. She recently launched Donna Merrill Buzz offering great interviews with top bloggers who share their secrets to success.

Check out this interview with Leslie Federici co-founder of Power Affiliate Club. This is a great resource if you are new to affiliate marketing.

She's got more great interviews on Donna Merrill Buzz. Go check it out!

For a list of affiliate networks check out these posts:

The Top 19 Affiliate Networks For New Bloggers

The Best Affiliate Networks and Merchants For Blog Niche Bloggers

Over To You

So that's what affiliate marketing is in a nutshell.

I hope this post clarified any questions you had.

But If you have any other questions feel free to leave them in the comments below.

If you're a seasoned affiliate marketer, I would really appreciate any advice you have to share as well!

And before you go, don't forget to share this post on social media!

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Source: Affiliate Marketing 101: A Breakdown For Beginners