What is affiliate marketing and how to make money with it

Updated: Nov 7



To successfully run a business on the Internet, it is not always necessary to have goods, an online store, or a website. Affiliate marketing allows anyone who has access to the World Wide Web to make money. Thanks to affiliate programs, everyone can profit: buyers get goods and/or services they need, companies – customers, and affiliates – money.


What is affiliate marketing

Affiliate marketing, also known as partnership marketing, is a type of online business that implies cooperation with affiliate programs.

Companies create affiliate programs so that their webmaster partners help to attract customers for consideration. Affiliates promote the advertiser's products and get affiliate payments for the buyers who came from them. Within the specified conditions, they choose a traffic source, prepare creatives, and set up targeting.


How does it work

To make the work more convenient and have guarantees that transactions will be reliable, many advertisers and webmasters cooperate with partner networks. The CPA network organizes the cooperation of parties and provides tools for campaign analytics.


What is an offer

In the CPA network, you can find offers from several advertisers. An offer is a page containing a description of a product or service and a call to action (this can be filling out a contact form, signing up, or subscribing). Each advertiser specifies his own requirements for traffic. It is obligatory to meet them since otherwise, the traffic will be untargeted and the advertiser will not pay for it.

For example, GEO or a country the target audience should come from can be one of the requirements. If the traffic comes from the untargeted GEO, the advertiser will be physically unable to deliver the goods there. And as a result, the webmaster will not be paid.


GEO of offers
GEO of offers

Traffic sources are another important requirement. The advertiser does not want to waste money paying for low-quality leads coming from spam, incentive traffic services, or other prohibited platforms.


Prohibited traffic
Prohibited traffic

Traffic sources

These include web resources, platforms, and websites where the target audience, Internet users gather. Webmasters place ads in traffic sources to bring leads to the advertiser.

Free sources – the ones where you can advertise goods for free – require lots of time, constant activity, and work to increase the trust of the audience in what you offer them. Some examples of free sources:

  • Personal website, blog.

  • Groups and accounts in social networks.

  • Youtube or Twitch.

  • Crowd marketing: comments on forums and blogs.

  • Reddit.

  • Pinterest.

Paid sources are more efficient in terms of time and give access to a large flow of traffic. However, there may be complex settings and a high risk of going negative with your budget. Some examples of paid sources:

  • Targeted ads in social networks.

  • Advertising networks: push ads, teasers, banners, popunders, native ads, and other formats.

  • Advertising with bloggers.

  • Contextual advertising: Google, Bing, and Yahoo.


Payment models

Each offer specifies a target action that the advertiser is interested in and the affiliate will be paid for. Here are the main payment models:

  • CPL – cost per lead – the affiliate is paid for the lead. Clients should provide their contact information in the lead form so that the advertiser can later send them offers.

  • CPA – cost per action – the affiliate is paid for the action. Depending on the offer terms, the target action can be a subscription or registration.

  • CPS, PPS – cost per sale, pay per sale – the affiliate is paid for the purchase or sale. Clients should buy the product or at least make an advance payment.

  • Revenue Share means the percentage of client’s purchases for life or for a certain period of time. For example, a client makes a deposit at a casino, then deposits money once again or loses, and the partner gets paid every time.

  • CPI – cost per install – the affiliate is paid when clients install the app. They should download and install the app on their smartphone.


An example of an offer with the PPS payment model
An example of an offer with the PPS payment model

How does the affiliate program know who the client came from

When affiliates choose an offer, a unique referral link is assigned to them. The CPA network system and the advertiser use it when registering the traffic and determining webmasters it came from.


What is Smartlink and why to use it

Some affiliate programs provide Smartlink, a “smart” link. It is a useful tool with artificial intelligence that can distribute traffic to convenient offers.

For example, the Smartlink of the Datify.Link platform can analyze the incoming traffic and collect user data by their GEO, device, browser, Internet provider, and other parameters. After that, it will direct potential buyers to the most relevant offers and the ones where conversion may be the highest.

Smartlink advantages:

  • Ability to monetize any traffic. For example, people from different countries click on an ad. Smartlink will analyze users’ GEO, and those who live in Mexico will be directed to an affiliate program offer that accepts users only from Mexico, and the rest – to an offer with the WW (the whole world) GEO.

  • Saving time and money spent on tests. Smartlink algorithms analyze incoming data. Moreover, they are constantly learning.

  • There is no need to prepare several landing pages. Smartlink redirects traffic to the landing pages that are already adapted as much as possible to the behaviour of the audience.

  • Quick start for beginners. If so far you don’t know how to set up campaigns, it will be easier for you to start with a CPA network offering a Smartlink. It will take on the task of analyzing the incoming traffic and directing it to the relevant offers.


How does Smartlink work
How does Smartlink work


Who can use affiliate marketing

Anyone can use affiliate marketing. It doesn't matter whether a person has a website or not. But what they definitely must have is the desire to learn marketing and the features of online advertising, and have enough time.

To succeed in this business, you should know how to analyze the results of your marketing activities and quickly respond to changes in the situation. It is important to study trends, carry out research on the audience, market, and competitors, and enhance the pool of your technical knowledge.


How to make money with the help of affiliate marketing

To earn money with affiliate marketing, you will have to go through the following stages:

  1. Choosing an affiliate program and a niche. This will be discussed in more detail in the following units.

  2. Choosing an offer. You should familiarize yourself with the GEO, target action, and allowed and prohibited traffic sources.

  3. Analyzing the target audience. It is important to collect information about the behaviour of the target audience, targeting parameters, GEO culture, and customs.

  4. Choosing a traffic source. At the first stages, several sources can be chosen and tested.

  5. Connecting a tracker. It is software that gathers detailed analytical data on the traffic and helps to find promising links. Most trackers are integrated with affiliate programs and sources, and therefore, they are set up in one click. Almost all trackers have a free trial period.

  6. Preparing creatives. Creatives are selling ad texts and images shown to the audience. When preparing them, the requirements of the source and affiliate program should be taken into account.

  7. Adapting or creating a landing page. If you use a Smartlink, this step can be skipped. It is recommended to check the advertiser’s landing page so that it complies with the source rules and is adapted to mobile devices. To run traffic to some offers, for example, gambling, nutraceuticals, adult, a pre-lander is used. It encourages clients to perform the target action and protects them against bots and moderators.

  8. Setting up a campaign in the source. Taking into account the offer requirements and the results of the conducted analysis of the target audience, you should set up targeting and determine the budget and the interest rate if you use a paid source. When it comes to free sources, creatives are placed on the platform in the form of a link, article, post, or video, and a funnel is configured for the landing page.

  9. Testing. After the launch of the campaign, it is necessary to collect information about clicks and conversions. Your source settings permitting, you can conduct an A/B test to determine which option has the best result.

  10. Campaign optimization. Inefficient creatives and targeting should be disabled or the ad text should be changed. After that, test them once again.

  11. Withdrawal of money from the affiliate program. At this stage, you can calculate your profit. For that, subtract advertising costs from the income from the affiliate program account.

Affiliate marketing includes constant tests and analyses. From the first time, not everyone can make good money. You should be aware that the first campaigns go to negative or zero. But the more data is collected, the more experience you have to succeed.


Types of affiliate marketing

There are two main types of affiliate marketing. These are:

  • Working with the CPA networks. Benefits for the partner include the availability of tools for analytics, the assistance of a personal manager when choosing an offer and a traffic source, and a guarantee of the advertiser's reliability. But there are some disadvantages as well: the CPA network charges a commission for its services, and for the partner, it means a slightly lower interest rate.

  • Working directly with the advertiser. Higher interest rates are the advantage while the absence of the range of options and services provided by the CPA networks is a drawback.


How to choose an affiliate program

When choosing an affiliate program, it is advisable to focus on the following aspects:

  1. Conditions for the start of cooperation. There are CPA networks that accept only experienced arbitrageurs. To work with them, you will have an interview with the manager and you will be asked to provide some cases. Affiliate programs that are loyal to affiliates of any level will do well for beginners. For example, with Datify, you can run traffic almost from scratch.

  2. Availability of a Smartlink. The tool will help a lot an affiliate of any level since Smartlink will save time and money necessary for tests. Datify has such an option.

  3. A wide range of offers and niches. You will be able to choose from a large number of offers and advertisers.

  4. Provided tools. The CPA networks provide several tools. These are the integration with trackers (systems for deep analytics), training materials, and postback links for tracking conversions and leads.

  5. Support. How it works, in what mode, and how quickly it helps to solve problems.

  6. Reputation in the market, reviews. You should not completely believe the reviews, but they can tell you about possible pitfalls.

  7. Flexible conditions and an individual approach. When an affiliate decides to scale up and attract more high-quality traffic, there will be a nice bonus in the form of an increase in rates and personal privileges.

  8. Terms of payment. You should pay attention to the terms of payment, methods of receiving payment, and hold.


Ways to withdraw money from Datify
Ways to withdraw money from Datify

How to choose a niche

You can choose a niche or vertical based on:

  • Experience. When you have certain experience in online advertising or any field, it is easier to act based on what you already know. It means that, for example, an economist will promote financial offers more effectively while a person who is an expert in gadgets – the commodity ones.

  • Preferences. If you are interested in a niche, there will be extra motivation. It is difficult to sell anything if it is not of interest to you.

  • Available resources. For example, a gamer who has a YouTube channel with thousands of subscribers should choose the gaming or gambling vertical.


The verticals which will be the easiest for beginners are:

  • Dating. This niche deals with the promotion of services of dating websites.

  • Adult and webcam. It is a dating section promoting sex dating, adult products, and services.

  • Gambling. These are offers of online casinos and gambling services.

  • Betting. These are bookmaker offers, predictions, and sports betting.

  • Nutraceuticals. These include offers of dietary supplements, cosmetics, and non-prescription drugs for beauty and health. The most popular fields are weight loss, rejuvenation, potency, hypertension, good sight, etc.

  • Finance. This vertical is associated with banking products and services (loans, deposits, credits, and cards).

  • Crypto. It is a niche of cryptocurrencies, investments, and trading.

  • Shopping and e-commerce. These include offers and affiliate programs of online stores and marketplaces that offer physical goods of daily demand.

  • Sweepstakes. These are offers of companies offering prizes in return for leads – contacts of users.

  • Games. This vertical is about the promotion of mobile and computer games and various services, such as character boost.

  • Utilities. These are offers of various services for PC and smartphones, for example, VPN, antivirus, and cleaners.


Types of categories on Datify
Types of categories on Datify

Conclusions

Affiliate marketing is a business you can learn from scratch. An experienced affiliate is a marketer, seller, and designer in one person. In due course, to set up a postback link, integrate the Facebook pixel into the website, set up a cloaca, and automate campaigns through the connection of third-party services, there will be required technical skills.

But all this knowledge can be taken from open sources. Many CPA networks provide free training, hold webinars, and publish specific articles and guides. To start working in the field of affiliate marketing, it is better to choose an affiliate program with loyal terms, a wide range of offers, and a Smartlink. Datify is one such universal platform.


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