The Principles Of Affiliate Marketing
1. Affiliate Website
An affiliate website could be a price comparison website, review website, a social media influencer (or any other media owner) that provides information to the potential customer. If a customer wishes to purchase the product they simply click the affiliate link through to the advertisers website.
2. Tracking Network
The affiliate tracking network is able to track the visitor and check if the user has completed a purchase within 30 days. The tracking networks do this by using cookies.
The customer then purchases the product on the advertisers website within the given cookie duration.
Once a sale has been made and the purchase path is valid, the affiliate is paid commission on each sale. Depending on the affiliate programme this may be a fixed amount or the percentage of a sale.
Affiliate Marketing In More Detail
In essence, Affiliate marketing is a marketing tactic that lets businesses advertise on digital media on a performance basis.
Affiliate Marketing has 3 stakeholders:
- Merchant, Advertiser or Retailer – The entity that is looking to buy customers and sales on a performance basis.
- Affiliate or Publisher – The entity that is looking to send traffic to the retailers and be paid on a performance basis
- Network or Tracking Solution – The system behind the scenes that tracks the transactions and browsing behaviour of potential customers.
How It All Works
The affiliate will require a tracking url which they can place on their website, emails, Facebook Page, Instagram or other owned media. The affiliates will use this url in a number of different ways maybe a simple click here or placed behind a banner or email creative.
The tracking urls will normally have identifiers in them that identify the affiliate and retailer. Tracking urls will also allow the affiliates to pass references through against each click so they can identify the source of the transaction, such as which banner on their site it came from or which Facebook post. The urls will also allow the affiliates to link to different pages and products on the retailer websites.
Once a visitor clicks on a tracking link, tracking cookies will be places on the users device which will sit there for normally 30 days. Within the next 30 days if that visitor makes a purchase with the retailer a sale will be tracked back to the affiliate. The retailer website will have some tracking code which triggers off when that sale has been made. This is typically found on the checkout/order completion screen.
Once the tracking code has triggered off this will let the tracking system create a commission for the affiliate. Commissions can be fixed amounts per sale, variable amounts based on the basket value or pay commissions based on the products in the basket. Some affiliates may earn more commissions than others.
There will be some reporting tools that let the affiliate and retailer see the sales that have been generated. It’s normal for the retailer to check the sales are valid, including making sure that the order was shipped and that it wasn’t returned. Affiliates are normally paid each month for the sales that have been approved by the merchant.