Learn Affiliate Marketing: The Beginner’s Guide

Take a moment to think back to your last online purchase. Did you go directly to the website to place your order, or did you do some research first? Perhaps you consulted a website that tests and reviews different products, like Wirecutter or the Strategist, or sought the recommendations of a trustworthy blogger. If so, you likely clicked on a custom link to their recommended product to make your purchase. The process is a common example of Affiliate Marketing.

What Is Affiliate Marketing?

Affiliate marketing is a performance-based advertising model in which individuals or businesses promote products or services online and earn a commission for each action generated through their efforts. In simpler terms, affiliate marketing is when someone promotes another company’s product or service in exchange for a commission. In the example above, the referring website (Wirecutter, the Strategist, or your favorite blogger) is the affiliate. They receive a commission from the purchase you make after visiting their site and clicking on their affiliate link. 

A brief history of affiliate marketing

You might think of affiliate marketing technology as something that developed during the dot com bubble or as a byproduct of society’s obsession with social media, but it was actually first introduced in 1989 by serial entrepreneur William Tobin. He used the model to promote his recently launched e-commerce company, PC Flowers and Gifts, on Prodigy, a leading internet service provider at that time. By 1993, this model, in which Prodigy served as the affiliate by sharing PC Flowers and Gifts ads on its pages, generated millions of dollars for both parties. 

Tobin may have created the Affiliate Marketing model, but Amazon brought it to the masses. In 1996, Amazon unveiled its Associate’s Program, introducing the affiliate model as we know it today and making it available to smaller retailers. Other major affiliate networks, such as Linkshare (now Rakuten) and Commission Junction (now CJ Affiliate), emerged shortly after.  

Today, the affiliate marketing industry is valued at $17 billion and, with the increasing popularity of online shopping, shows no sign of slowing down.  

Why should I care?

Technology facilitated the growth of affiliate marketing in several key ways. First, it significantly simplified sales attribution. Instead of guessing what behavior led to a sale and who was responsible for it, affiliate links could be traced back to the source. Digital marketing attribution continues to be a highly discussed topic today, but affiliate technology was one of the first steps in simplifying attribution digitally.

Secondly, affiliate marketing technology enabled companies to grow their digital marketing efforts at scale. It also made the affiliate marketing model available to a wider audience. Throughout this post, we’ll explain how affiliate marketing can expand a company’s digital presence exponentially while benefiting both the company and affiliate marketers.

The Affiliate Marketing Ecosystem

Before we go any further, we’ll define some key terms in an affiliate marketing transaction.

1. Affiliate – The brand or individual helping to sell a product or service for commission
2. Affiliate network – A third-party company that provides the technology to track conversions and manage commission payouts to the affiliate. Examples of affiliate networks are Rakuten, Awin, and CJ Affiliate.
3. Affiliate program – A company’s self-managed affiliate marketing programs and technology. An example of an affiliate program is the Viator Partners Affiliate Program.

With these terms defined, affiliate marketing itself is quite simple.

Step 1: A company selects an affiliate or affiliate network to partner with. Note: there are different models for affiliate compensation that we’ll discuss later on. In most cases, affiliates receive a percent commission on the products or services sold.

Step 2: The affiliate receives a custom link or display ad from a company’s affiliate program or an affiliate network. This link contains tracking elements that will attribute the desired audience behavior, which we’ll refer to as the conversion, to the affiliate.  

Step 3: The affiliate shares the link on their social media channels, website, or anywhere else they can influence their audience to convert. 

Step 4: A customer clicks on the affiliate link and converts.

Step 5: The affiliate is credited with the conversion and receives a commission.

Multiple customers can use affiliate links simultaneously, with no limits, allowing steps 4 and 5 to repeat. Because of this, affiliate marketing is referred to as a way of earning passive income, meaning it requires little to no daily effort to maintain. 

Affiliate marketing is appealing to companies for the same reason. The right affiliate can be a much cheaper and sometimes more effective sales team.

Affiliate Marketing Example

Now let’s take the model above and bring it to life with our affiliate friend, “Francis.” We’ll use Francis to help us illustrate different concepts throughout this post.

Francis has a successful travel blog called “Francis Flies Solo.” She writes about her experiences as a millennial woman traveling the world on her own. Her blog is popular among women between the ages of 25 and 35 looking for recommendations on female-friendly vacation destinations and safety tips for solo travel.

Francis capitalizes on her active fanbase by selling placements for display ads, developing sponsored content, and through several affiliate programs, including the Viator Partner Program. 

How Do You Earn Money with Affiliate Marketing?

How creators earn money through affiliate marketing depends on several factors, including whether they work directly with a company or through a third-party affiliate network, the value of products or services they promote, and desired audience behavior. 

The three most common models for affiliate compensation are pay-per-click (PPC), pay-per-lead (PPL), and pay-per-sale (PPS).

Pay-per-click (PPC) 

The affiliate is paid for each click they generate. The pay-per-click model is used infrequently for affiliate marketing because there is no guarantee that a click will lead to a purchase. In this model, a company would pay an affiliate commission on a behavior with relatively low chances of conversion. Pay-per-click is a more common compensation for display ad placements in top-of-the-funnel awareness campaigns.

 Pay-per-lead (PPL) 

The affiliate is paid for each lead they generate. Common lead actions are email sign-up, form submission, or anything else demonstrating purchase intent short of a completed purchase. Like PPC, this is a less popular model for affiliate compensation because there is no guarantee of purchase. 

Pay-Per-Sale (PPS)

The affiliate is paid for each sale they generate. In the example above, Francis receives an 8% commission on all completed experience purchases from her links. This is the most common model for affiliate compensation because a company only pays an affiliate when money has been earned. This model incentivizes an affiliate to promote a service or product aggressively, and the company benefits from their efforts with minimal risk.

How Much Money Can You Earn with Affiliate Marketing?

Affiliate marketing is often cited as an easy way to earn passive income. But how much do bloggers and influencers make from this channel alone? And are the earnings really as “passive” as many creators claim? 

Before we look at numbers, it’s important to understand that affiliate marketing earnings are directly related to the amount of traffic a website, blog, or social media account generates. You must have an engaged audience to earn money with affiliate marketing. Most affiliate programs will only work with content creators who demonstrate that they have a minimum monthly traffic.

With that in mind, let’s look at some numbers from Influencer Marketing Hub.

From this chart, you’ll see that only 3.78% of affiliate marketers make more than $150,000 a year, and over half of all affiliate marketers earn less than $10,000 a year. This tells us that only a select few are making a comfortable living from affiliate marketing alone. However, affiliate marketing can provide a significant amount of supplemental income for those who have already built or are building an online presence. Remember, affiliate marketing is only one piece of the earnings puzzle for bloggers and influencers, and there is endless potential for growth as time goes on.

In a previous post, we shared earnings for top travel bloggers. While total monthly income varies considerably based on the popularity of the blog and travel seasonality, we’ll provide monthly affiliate incomes for those bloggers to provide additional context about affiliate earnings:

These travel bloggers earn anywhere from $1,000 to $12,000 a month from affiliate marketing. However, they all use other monetization strategies to supplement their income and support their lifestyles.  

What’s Required to Be Successful with Affiliate Marketing?

The short answer is traffic. Below, we’ll focus on ways to generate traffic to your blog, but the advice can also be applied to growing your social media presence. These tips can help creators with existing accounts and those just starting out.

The Basic Steps

1. Pick a niche

The first step to building an active audience is to choose a niche. With the sheer volume of existing websites (According to Web Tribunal, there are more than 600 million blogs out of a total of 1.9 billion websites), consumers and search engines have developed a preference for in-depth, authoritative content. Focusing on one topic – whether travel, food, history or something else – will reduce your pool of competing blogs from 600 million to a more manageable figure, depending on how specific you get.

Example:

Let’s revisit our affiliate friend, Francis. Her travel blog “Francis Flies Solo” is one of millions. Yet, her content focuses strictly on her unique experiences as a millennial, female, solo traveler. How she incorporates these elements of her identity into her content distinguishes her from other general travel blogs and makes it easier for her target audience to find her.

To help determine your niche, ask yourself the following questions:

1. What do I love to write about?
2. On what subject matter am I an expert?
3. Is my perspective unique? Will I be competing with hundreds (or millions) of similar accounts?

2. Research your audience

You might assume that because your audience enjoys your content, they share your online habits and preferences. Don’t fall for this trap! So many free analytics tools are available across platforms to help you uncover meaningful insights about your audience based on cold, hard facts. Use data, not assumptions, to deepen your knowledge of your audience and create meaningful content for loyal followers and newcomers. 

Quantitative and qualitative data (collected from surveys and comment sections) will help you identify and grow an engaged audience.

Example:

Francis uses Google Analytics to view demographic information about her blog visitors. While most of her visitors are female, ages 25-35, from English-speaking countries, she sees that certain posts bring in both male and female readers. 

Recognizing an opportunity to expand her audience, she interviews a male solo travel blogger about his professional journey for a new blog post. In addition to the SEO benefits of outbound links to another well-known blog, the new post provides another entry point for her male visitors to engage with her content.

3: Go where your audience is

Your research from Step 2 will tell you which platforms and channels your audience uses. Listen to the data (and recommendations from your followers) and meet them where they spend their time online. 

Blog:

Creating your own blog will give you the most creative freedom and allow you to manage and organize your content on your terms. Regardless of your success on other platforms, we recommend maintaining a blog to compile and promote your affiliate links with minimal external oversight. Plus, Google Analytics and Google Search Console provide the most robust (free!) insights about your audience, but you must have an active website to use them.

Social Media:

Social media accounts are free and relatively simple to set up, so create accounts for each major platform and build out your strategies based on which performs best. Affiliate marketing usually benefits from the use of strong visuals (product photos or videos of an experience, for example), so start with Instagram and Facebook (through Meta), TikTok, and YouTube (through Google), but don’t count out X (formerly known as Twitter) where you can easily share your affiliate links. Cast a wide net at first and use the data insights provided by each platform to decide where to focus your efforts.

Example:

In addition to her blog, Francis creates content for multiple social media platforms. She had always considered Instagram her strongest social media performer but has recently seen an uptick in subscribers to her YouTube account. In addition to the short clips she posts on Instagram, she’s found that her audience has an appetite for the long-form video reviews she posts on YouTube and then embeds into her blog. Many of her most recent followers have actually discovered her content on YouTube first and then made their way to her blog and social media accounts – instead of the other way around. She builds out her long-form video content strategy based on these findings.

Step 4: Grow your audience by building world-class content

The only real way to break through the sea of competing blogs to your target audience is to create high-quality content. Both search engines and discerning audiences will favor thoughtful, specific, well-produced content. There is no way around this requirement.

What is good content?

Google uses the EEAT framework to evaluate the utility of content, but it provides a good foundation for all content creation. 

E – Experience: Does the content creator have first-hand experience?

E – Expertise: Does the content creator have relevant knowledge or skills?

A – Authoritativeness: Is the content creator a go-to source on the topic?

T – Trustworthiness: Can you trust the content creator?

Example:

Let’s explore the EEAT framework through our favorite content creator, Francis.

[Experience] When it comes to Francis Flies Solo, Francis is uncompromising about her content creation process. She makes it clear to everyone – her audience, businesses, and potential sponsors alike – that she will only write about experiences that she has gone on herself. She will only promote products or services after trying them out first. 

[Expertise] Francis’ blog is almost ten years old. Over the past ten years, she’s built a loyal online following of both travelers and industry professionals who appreciate her honest and thoughtful reviews. [Authoratativness] In fact, her blog is listed in several travel magazines as an “account to follow” for female solo travel tips.

Every blog post receives hundreds of comments. She works diligently to reply to each comment and maintain a safe and respectful forum for her followers. [Trustworthiness] This dedication and attention to detail have made Francis Flies Solo the first stop for millennial women planning their travel.

Step 5: Partner with affiliate programs to monetize your audience’s engagement

So you’ve created your accounts and built up a loyal audience. Now we can finally talk monetization!

In 2009, renowned affiliate marketer, Pat Flynn, outlined the three ways to categorize affiliate marketing relationships:  Unattached, Related, and Involved. By understanding these models, you’ll be able to choose the one that best fits your brand and offers the most earning potential.

Unattached:

Affiliates promote a product or service, usually via a pay-per-click compensation model, unrelated to their niche, that they have no connection with. They offer no advice or anecdotal evidence of their experiences with the product or service. This model appeals to businesses seeking top-of-funnel brand awareness at scale and affiliates with high enough traffic to generate clicks without active promotion. An example of unattached affiliate marketing is a cooking blogger promoting a new car for a major manufacturer.

Related:

Affiliates promote a product or service that they have not personally experienced but is related to their niche. Related affiliate relationships are a middle ground between hands-off unattached affiliate marketing and highly engaged involved affiliate marketing partnerships. An example of related affiliate marketing is a personal trainer promoting a new chain of gyms without actually going to the gym. Since the trainer’s niche is fitness, the gym will appeal to her followers even though she doesn’t work there or use the gym herself.

Involved:

Affiliates promote a product or service related to their niche that they’ve used or experienced. On the opposite end of the spectrum from unattached, this form of affiliate marketing requires the greatest effort from an affiliate but has the greatest potential payoff. Francis would seek out This type of affiliate marketing relationship because she vets every product and experience she features on her blog. Because she has established herself as an authority in the solo travel space, her audience can trust her reviews, which are always thoughtful and in-depth, and are more likely to make purchases based on her recommendations. 

How to Choose The Right Affiliate Marketing Program

With an understanding of the different types of affiliate marketing relationships (Unattached, Related, Involved) and compensation models (PPC, PPL, PPS), choosing an affiliate marketing program is the easy part.

Before researching affiliate marketing programs, think about what product or service you’d like to promote. Chances are, there’s already a program in place to connect you with that type of product or service. By visualizing your ideal partnership beforehand, you’ll go into the search knowing what you want and, more importantly, don’t want.

Conclusion

As Francis has shown us throughout this educational journey, with affiliate marketing, it literally pays to create good content. Let’s recap what we’ve learned.

1. Affiliate marketing affiliate is when someone promotes another company’s product or service in exchange for a commission. 
2. Three popular models for compensation are pay-per-click (PPC), pay-per-lead (PPL), and pay-per-sale (PPS). 
3. The amount a creator makes with affiliate marketing is directly related to how much traffic a blog or social media account receives. The more active and engaged your audience, the more money you’ll make.
4. If you’re just starting out, creating high-quality, authoritative content is the best way to build traffic in your niche. Use Google’s EEAT framework to help guide your content creation.
5. There are three types of affiliate marketing relationships: unattached, related, and involved. We recommend involved relationships for content creators looking to cultivate engaged audiences and monetize that audience loyalty.

To succeed, you don’t have to be a celebrity with several million followers. You just need to be able to create engaging, high-quality content to captivate your target audience. The more you listen to your audience, the better the content you’ll be able to create, and the more your audience will trust your recommendations. All this hard work will pay off when your audience takes your advice to heart and exercises their collective purchasing power for your financial benefit.   

 Are you a travel blogger? Sign up for the Viator Partner Program and put these affiliate marketing tips into action.