Is Affiliate Marketing Right for You?

Michael Bendit - Is Affiliate Marketing Right for You?

{3:17 minutes to read} My last blog post focused on the content producer’s side of affiliate marketing—those who generate income from their online content by redirecting readers to e-commerce sites where a purchase results in an affiliate fee for the publisher. This post explores affiliate marketing from the side of the marketer who pays those affiliate fees and addresses whether it might be a valuable part of your marketing mix.

Like most marketing tactics, affiliate marketing isn’t right for everyone. First of all, you need an online offering that leads to a transaction that’s easily traceable to the affiliate source. Your online sale also has to be sufficiently profitable to pay a commission big enough to be of interest to a prospective affiliate publisher. Finally, the product has to be one that enough buyers will research on the Internet to help them make a purchase decision.

Tennis racquets (covered in my last blog) are a great affiliate marketing candidate in that they meet all three criteria, whereas something like triple-A batteries, a price competitive commodity that people rarely research online, are not.

Assuming you have a product that meets all three criteria, how do you decide whether or not to run an affiliate marketing campaign? One way is to compare affiliate marketing to alternative online advertising models. Affiliate marketing is often described as CPA (Cost Per Action) or CPS (Cost Per Sale) advertising, because the marketer only pays when the prospective buyer either purchases a product, or performs an action of value to the marketer—like filling out an application.Michael Bendit - Is Affiliate Marketing Right for You?

This is distinct from CPC (Cost Per Click) or CPM (Cost per thousand views), which incur a fee when the prospective buyer either clicks on or simply views a digital ad.

CPA sounds like it might be a much better deal, but it’s usually much more expensive than either CPC or CPM, from which you might actually drive more conversions or sales per ad dollar. This MonitizePros blog post does a pretty good job of comparing these three approaches in greater depth.

If, after comparing these alternatives, you think that affiliate marketing could be a cost-effective way to drive sales, you won’t want to go it alone. As with CPC and CPM advertising, CPA advertising is made accessible to most marketers by advertising networks that match affiliate advertisers to publishers interested in monetizing their content. These networks also provide software platforms to help you manage your affiliate program.  

In choosing an affiliate marketing network provider, you might want to start with this list of the top 20 affiliate marketing networks. Not surprisingly, some of the biggest e-commerce networks, including eBay and Amazon, are on this list and are often a very good fit for smaller online stores because of the breadth of their e-commerce offerings.

Affiliate marketing isn’t for everyone, but if you want some guidance to determine if it is right for you, please don’t hesitate to contact us.

Michael Bendit

Michael Bendit
Managing Director
Software Development Resources Inc.
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