11 Affiliate Marketing Benefits and 6 Tips to Maximize Them

Over the past five years, spending on Affiliate Marketing in the US has increased by more than 65%. In the year 2017, companies spent 5.4 billion on affiliate marketing. This year the number is expected to reach at least 8.2 billion.

Curiosity about the advantages of affiliate marketing has grown even more. Search volume for affiliate-marketing-related keywords rose by 300% during the same time.

The growing popularity is a sign that marketers expect benefits from affiliate marketing. And with good reason. Read on to better understand how to maximize those advantages in increasingly competitive markets. Spoiler: Snatch competitor’s affiliates.

What are the benefits of affiliate marketing?

Benefit #1: Affiliate Marketing is cost-effective.

Probably the biggest affiliate marketing benefit is that it is cost-effective. As a vendor, you save costs and resources and get a high ROI. The affiliate saves on storage, transportation, and other logistics costs because all they do is advertise.

Benefit #2: Affiliate Marketing is easy to set up with little or no investment.

You can start an affiliate program with little to no investment. Blogging makes up 65% of affiliate marketing activities, and it costs nothing. Letting others blog or review your product on their blog doesn’t cost you anything.

Bloggers, influencers, and review and comparison sites own their channels and websites and produce their own content. As an advertiser, you don’t need to provide advertising materials or launch campaigns yourself.

Benefit #3: Once set up, affiliate marketing requires low ongoing costs.

A benefit of affiliate marketing for a vendor is, you save on campaign advertising costs. Even if you decide to work with PPC affiliates or similar publishers and the asset creation is on you, your expenses remain relatively low compared to the return. Once the assets are produced, affiliates can customize and reuse them.

Benefit #4: Affiliate marketing programs generate high ROI.

16% of all online orders can be attributed to the affiliate industry. These are sales that involve minimum marketing expenses.

Also, payment is performance-based, so you don’t pay the affiliate for their effort or time. You only pay for results. Most affiliate payment models count conversions. The affiliate partner promotes your product or solution and receives a fee for every potential client they bring to your doorstep. In this concept, the affiliate is motivated to drive high results and you keep your spending low.

Benefit #5: The risk involved in affiliate marketing is low.

The main benefit of results-based payment models is risk minimization. As you pass the responsibility for publishing to the affiliate, you also pass on some of the risks. Marketing campaigns can be costly, and there’s no guarantee they’ll generate the return you hope for. The moment you invest less, you risk less.

With affiliate marketing, you don’t put your money at risk but keep it until you see actual results. When you run an affiliate program, you set the rules so you can protect your brand name, reputation, copyright, etc. And if you hook up with affiliate companies or networks, you’ll do your research first to ensure their suitability.

Benefit #6: Affiliate Marketing allows you to reach additional audiences.

You open the doors to the affiliates’ audiences that would otherwise remain unreachable to you – or you’d have to invest considerable amounts of money and resources.

Another affiliate marketing benefit is that affiliates use their own channels and have their own followers, readership, or even members. The moment you hook up with an affiliate, you gain exposure in their network.

Let’s say you work with bloggers who write for a target audience that could potentially benefit from your product but don’t actively look for products online. The blogger, vlogger, or podcaster can reach those people with informative content. Or, if you don’t invest in a social media strategy, you can work with influencer affiliates with many followers on social media. Large affiliates often reach a general audience looking for deals and bargains.

Benefit #7: Traffic volume increases significantly with affiliate marketing.

Affiliates don’t just reach a wider audience, they also bring them to your site. The unique advantage of affiliate marketing is that it’s an effective, low-risk, and low-cost way to increase organic traffic to your site. Higher traffic volume can improve your ranking, grow brand awareness, and increase sales and profitability.

Benefit #8: With focused audience targeting you get high-quality traffic.

Small affiliates usually specialize in a section of your target audience. They could be active in specific geographical regions and reach a local population effectively. Some affiliates are experts in a specific field and can help promote particular product lines.

You can choose what type of affiliate to work with to help you reach specific niche audiences. And you can even hand-pick your affiliates.

Benefit #9: Affiliate marketing helps increase conversion rate.

For 40% of US merchants, affiliate programs are the top customer acquisition channel.

That’s an impressive percentage. Affiliate marketing, in general, generates higher conversion rates than other forms of digital marketing. Considering the benefits of affiliate marketing we’ve discussed so far, that shouldn’t come as a big surprise.

Another reason is vendors monitor the performance data of their affiliates closely. This leads to competition between the affiliates, and the vendor will obviously prefer to work with high-performing vendors. Monitoring data helps vendors identify which affiliates bring in the highest quality traffic and have the highest conversion rates.

Benefit #10: Higher brand recognition and awareness follow effective affiliate marketing.

Consumers like to buy from brands they recognize, and most people need to see something a few times before they are ready to buy. Affiliate marketing gets your brand and product in front of the right eyes.

Working with many affiliates ensures your brand stays top of mind for the right audiences. In some industries, publishers are the ones who build the brand.

Take software like VPN, web hosting, or website building as an example. When you search for content that’ll help you choose a product, Google almost exclusively shows affiliate content through blogs and reviews. Most sites talk about the same tools. So, software sites that don’t partner with the affiliates don’t appear in Google searches for top keywords.

Benefit #11: Affiliate marketing gives you a competitive advantage.

Combine all the points, and you’ll get a competitive advantage. Your costs are lower, your return is higher, your marketing is broader and more focused simultaneously, and your brand becomes well known.

Now, all you need is to pick partners carefully and track their performance, and you can optimize your affiliate marketing for maximum results and outperform your competition. Be aware of competitors who work with the same affiliates as you. To get ahead of them, you need to get competitive data on the vendor and the publisher.

How to maximize the benefits of affiliate marketing

Tip #1: Hook up with your competitor’s affiliates and grab traffic from them.

Why should you do this?

There are two reasons. Firstly, to beat the competition, you need to challenge them at their game. Don’t allow them to dominate the field. Your competitors’ affiliate resources can be valuable for you as well.

Secondly, you take your competitors’ traffic. You are hitting two birds with one stone: increase your own and decrease your competitors’ traffic volume.

How can you do this?

Find your competitors’ affiliates and see how much traffic they drive to that site. You can use Similarweb affiliate research to get the data. The tool lets you compare several competitors’ sites side-by-side.

• Pay attention to the number of referral visits and the total competitive traffic share.
• Find the leaders in engagement and then deep-dive into the stats of the individual sites you identified as having good potential for you.
• Discover new affiliates that send traffic to competitors but not to you. You know these are a good choice and give them a chance.

Here we compare three fashion retailer websites and see who sends them traffic.

When you’ve identified potentially valuable partners, reach out and make them an offer. Most will be happy to engage with you because it strengthens their position in the market, adds authority with audiences, and gives them negotiation power with vendors.

Tip #2: Work with different types of affiliates.

Why should you do this?

You don’t put all your bets on the same horse. By diversifying your affiliate partnerships, you can leverage various affiliate opportunities to reach different audiences in different ways.

For example, coupon sites target the spontaneous buyer who’s always looking for deals and never pays the full price. Influencers, on the other hand, have their audience of fans who love what the influencer loves. And that can be enough of a reason to buy.

Each concept speaks to specific buyer behavior. The same person who never opens a deal site may use a coupon code offered by their favorite influencer or follow a reviewer’s recommendation.

How can you do this?

Learn from the competition. Investigate which sites refer traffic to your competitors’ sites. Yes, again. This time, pay attention to the industries the referring sites belong to, which regions they operate in, and what type of affiliate they are.

Identify patterns and recurring factors for your competitors. Let’s take a travel site. You compare competitors’ sites in Asia and Europe. It turns out that Asian audiences respond strongly to coupon offers, whereas European sites get a lot more traffic from reviews and travel blogs.

You’ll hook up with a coupon site in Asia and offer an affiliate program for bloggers in Europe. You can see that referring sites come from different industries and likely provide different affiliate services. Next, check how the picture changes when you choose a specific region instead of the worldwide view.

Another way to find affiliates is based on search terms. Discover the top referring sites for a specific keyword or list of keywords. This enables you to identify additional types of affiliates that competitors haven’t discovered yet and that are able to generate traffic for relevant keywords.

Tip #3: Work with affiliates who have an engaged audience.

Why should you do this?

The affiliate landscape is crowded. Not all affiliates are credible. You want to find affiliates with the potential to send large amounts of high-quality traffic. This means the audience needs to trust the affiliates and recognize them as an authority.

Find out how engaged the audience is with the particular affiliate and compare it to the competition as part of the qualification process when choosing the right affiliates to partner with.

How can you do this?

One way is to check the affiliate sites and pages yourself. Check for trust elements, see if visitors can leave comments or contact the site owner and use social listening sites. That’s the hard way, but there are easier options.

Similarweb, for example, offers an engagement score for affiliates. The score factors primary engagement metrics such as visit duration, pages per visit, and bounce rate to assess the level of engagement of the audience with the affiliates’ website. The score represents the strength and potential of the referral traffic a site sends to the merchant.

Tip #4: Benchmark against the competition to identify gaps or scams.

Why should you do this?

Affiliates compete against each other, but vendors also compete for affiliates. Everyone wants to work with those who drive the most high-quality traffic. This puts the affiliate in a position to negotiate terms and payment conditions.

Uncover who else your affiliate sends traffic to and compare how they perform for you vs. them.

How can you do this?

Your competitor may offer more profitable conditions, and then the affiliate will send most of the traffic to them instead of you. Use Similarweb Digital Marketing Intelligence to benchmark traffic volumes and trends against the competition and discover who gets more. Knowing what your affiliates do for others puts you in a position to renegotiate.

Using the competitor affiliates function in Similarweb, you can see which of your competitors get traffic from your affiliate and who gets more than you. Now you can confront the affiliate and find out why. Maybe you need to update some conditions so you’ll be their preferred traffic recipient. Pay attention to the color bars. Each color represents a different site the affiliate refers traffic to and you can identify at a glance who gets more and who less or none.

Tip #5: Continuously tweak and optimize your affiliate marketing strategy.

Why should you do this?

The web is dynamic, and so is affiliate marketing. The competition is always breathing down your neck, trying to outperform you, and affiliates will work with whoever offers the best compensation.

In addition, web trends and seasons influence search and purchasing behavior. You can’t rely on one-time assessments and need to reevaluate your initial choices. Some form of affiliate marketing that is out of the question today may become relevant tomorrow, and a certain company that’s huge now may become irrelevant tomorrow.

How can you do this?

After you’ve identified potential affiliates, track and monitor their metrics. With Similarweb, you can create affiliate lists and keep tabs on the performance over time. You can also use the tracker function to get periodic notifications to your email.

View affiliates’ stats side-by-side to compare and see who’s winning and losing and in which metrics. This lets you discover growing or declining affiliates and identify trends in the industry.

Tip #6: Consider search intent in keyword research.

Why should I do this?

SEO accounts for the largest share of traffic sources to affiliate websites at 69%. This means you need to keep your site optimized for organic search, and so do your affiliates. Keyword research is critical to understanding your landscape. In general, affiliates must attract traffic for the same keyword that drives traffic to your site.

If possible, coordinate keyword preferences and SEO strategies. Communicate what you are after and what the affiliate should look for in their keyword research. The wrong search intent is an area that can lead to irrelevant traffic.

A single word in a long-tail keyword can make the difference between transactional and navigational intent.

How can you do this?

Take your list of keywords, including results generated by a keyword generator, and filter out the ones with the right intent. Focus your keyword research on those.

Search intent is relatively new for Google, and it’s a bit vague compared to other measurable factors. However, tools like Similarweb use algorithms to identify search intent, so you don’t have to identify and analyze the search results yourself. Similarweb identifies different search intents that help you target the right keywords and audiences.

Use the keyword analysis function and create a list to monitor only terms with relevant search intent.

Ready to seize your competitor’s traffic sources?

Competitors may be leveraging the benefits of affiliate marketing, keeping costs low, getting high-quality traffic, and generating excellent ROI.

You can find out. Investigating what the competition does in the affiliate industry and how successful they are with it can help you evaluate your strategy. Benchmark and analyze competitor data to learn what works for them.

Don’t let them enjoy the entire affiliate pie by themselves. Partner with their partners and keep the competition on edge.

FAQs

What is affiliate marketing?

In digital marketing, affiliate marketing is a marketing method in which one party promotes the product or service of another and gets paid per conversion or lead. The vendor or merchant wants to sell something, and the affiliate or publisher does digital marketing. The compensation is performance-based.

What are the advantages and disadvantages of affiliate marketing?

The main advantage is its cost-effectivity and the fact that affiliate marketing involves low risk. The disadvantage is that you have less control over the marketing activities because it is not in your hands.

What are the benefits of being an affiliate marketer?

Individual affiliate marketers are their bosses. They aren’t committed to any one company or product. Affiliate companies promote the products of others and collect compensation when they are successful. They don’t deal with production, packaging, and logistics costs and procedures.