Are you struggling to determine which channels are most suitable for your business and target audience when it comes to digital marketing? You might be overlooking affiliate marketing, a channel that isn’t just restricted to large brands. As an SME, your focus is on maximizing your marketing budget’s return on investment. At Awin, we understand these challenges, having supported over 25,000 growing online brands worldwide. We’ve witnessed first-hand the significant benefits that SMEs can reap by taking the leap into this exciting channel. In this guide, we’ll demystify affiliate marketing, explain its benefits for your business, and provide practical steps to get started.
What is Affiliate Marketing?
Affiliate marketing is a form of performance-based marketing. An ecommerce website, known as an “advertiser,” rewards a chosen partner, known as a “publisher,” for driving a pre-agreed action on their website. This action is typically a sale, but it can also include other valuable interactions, such as completing an online form or submitting an email address.
Why should you use Affiliate Marketing?
Reaching new audiences can be a challenge for small businesses. Affiliate marketing offers a solution by partnering with influencers, price comparison sites, voucher code sites, cashback sites, bloggers, and more. It helps online ecommerce stores reach vast new customers in a way that they often can’t alone or through costly digital ad platforms. These online partners act as intermediaries, connecting your online store with potential new customers. What sets affiliate marketing apart is that you only pay for confirmed results generated by your chosen partners, making it a cost-efficient channel for online businesses looking to grow online sales and reach new audiences.
How does Affiliate Marketing work?
Your chosen partners will promote your product or service to their own audience using a unique link to your product page or website. They can promote this link through various channels such as blog posts, social media, review videos, or display ads on their website. This specific link is unique to each partner and is tracked. By using an affiliate marketing platform like Awin, you can easily monitor the number of clicks and sales generated in a simple dashboard. You’ll be able to report and measure ROI against your marketing spend easily. When your partners drive successful actions, you reward them with a fee, known as a commission.
How much does Affiliate Marketing cost?
An affiliate platform will take a monthly membership fee to securely track these valuable relationships. With Awin, that’s only £75+VAT per month. Once you’ve discovered your partners, you’re in control of setting the commission that you pay them. For example, if you chose to reward your partner 5% for each completed sale, and they successfully drive a sale of £100, you pay them £5. The affiliate platform will take a small fee for connecting, tracking, and managing the sale, which is 2.5% of the sale value at Awin. In summary, on top of your monthly fee to use the platform, a tracked sale of £100 would cost you £7.50, offering great ROI for your marketing budget. It can even be more cost-effective than some of the large ad platforms.
When should you use Affiliate Marketing?
Affiliate marketing offers a year-round revenue stream for your business, so you can start a program anytime and get the benefits. While certain periods such as Mother’s Day, Valentine’s Day, Black Friday, Cyber Monday, and Christmas witness increased online sales, you can optimize their performance by cultivating strong relationships during less busy times. This enables you to gather data on fruitful partnerships and determine who to do more with. Planning ahead means you can be ready to take advantage of specific seasonal campaigns that partners may be running. This way, your affiliate partnerships are doing the heavy lifting for you in this busy period.
How do you get started?
Affiliate marketing is an effective and accessible online channel that can bring consistent revenue streams for small businesses. It’s essential to find secure and vetted partners through an experienced platform to promote your service or product effectively. Awin’s affiliate marketing solution, Awin Access, set up specifically to support small online businesses, has generated over £200m in sales for SMEs. It’s the perfect first step to reach new customers and grow online sales.