The Affiliate Marketing expenditure is estimated to cross $8 billion by the year 2020, estimates Statista. Considering the $5.4 billion spent in 2017, the Affiliate Marketing industry is growing at a fast pace.
But should you cash in on the opportunity?
A lot of influencers and online earning gurus will make you believe it’s something that everyone should be doing because it's easy and has considerable growth.
While the latter is true, Affiliate Marketing is far from a get-rich-quick scheme. It takes a significant amount of effort, time, and persistence before you start seeing those first few bucks rolling in.
To give you a better idea of how affiliate marketing works and whether you should dip your toes in it, we are going to discuss three major modes of affiliate marketing.
But before getting into the goodies, let us refresh the fundamentals:
What is affiliate marketing?
Affiliate marketing is a business model in which you (the affiliate) earn a commission on each sale you make by promoting a brand’s product.
The above definition gives a reasonably comprehensive understanding of the affiliate marketing system, but it is lacking, as it only covers three of the four parties involved in the process.
While a person can establish a direct relationship with a brand and promote its product for a commission, more often than not, an intermediary party (an affiliate network) is involved.
An affiliate network aids in payments and product delivery while also acting as a database of products that the affiliate can choose to promote.
So, an actual affiliate marketing system will involve the following parties:
- The affiliate (promoting the product and getting a commission)
- The brand (whose product is being promoted and sold)
- The customers (who are buying the products)
- The affiliate network (intermediary)
YouTube, being the second largest search engine, is used by over 73% of adults according to Pew Research Center.
And with over 2 billion monthly users, YouTube is a goldmine for affiliate marketing.
But before you start generating loads of cash out of it, here are all the things you’ll need to make it big by doing affiliate marketing on YouTube:
- YouTube account
- Affiliate Network
- A decent operating system
- Video editing software
- Camera, microphone, webcam, etc.
How much would it cost?
Considering that you already have a reasonably sound computer, you’ll need to invest in a camera, microphone, webcam, and a monthly subscription of a video editing software, all of which would cost you anywhere from $300 to $500 (most of which is a one time expense).
Pros & Cons
- We’ve already looked at the statistics of how huge YouTube’s monthly traffic is, and greater traffic means greater conversions (and more commission).
- Owing to the popularity of video content on the internet, a staggering 88% of marketers said that videos gave a positive ROI (return on investment). Considering the growth of video on the internet, it’s safe to say that YouTube affiliate marketing is only going to grow in the coming years.
- Unlike Facebook that can kill a page’s reach with a slight change in it’s algorithm, YouTube is a subscriber-based platform, making it a much more stable platform.
- More than 55% of search results show at least one video and 80% of those videos come from YouTube, estimates Tubular Insights. It clearly illustrates how easy it is to rank videos.
- Video content creation is not easy. A lot of effort and time goes into writing the script, making the video, editing it, and then uploading it on YouTube.
- Niches like tech, gaming, etc. are highly saturated, making them difficult to excel in. There are others like DIY plumbing that are easier to rank but require a huge amount of effort in content creation.
What kind of videos should you make?
There are a plethora of video formats on YouTube, but just a few of them became successful for affiliate marketing. These include:
- Comparison videos/product reviews
- Best-of videos (Best smartphones of 2020, best shoes for jogging, etc.)
- How-to videos (DIY, How to build a shack, etc.)
Still, video format or niche is of secondary importance. The most important thing to remember is to provide value to your customers. If you are creating salesy content without providing any real value, then regardless of your video format or niche, you are more than likely to fail.
It is best to choose a niche you are passionate about, something you know inside and out. That way, not only can you provide value to your customers and build their trust (which will compel them to click the affiliate links), but you will also enjoy the process.
How to get traffic?
The whole idea of YouTube affiliate marketing is based on viewership. Therefore, it is only logical that a good amount of effort should be spent on getting more traffic to get more sales.
Here are a few different strategies you can employ to get more traffic:
Google & Organic Search
Ranking on Google is a great way to get more viewership.
You can do this by finding queries that have video ranking using Ahrefs (SEO tool).
Don’t forget to do keyword research to find keywords that have huge search traffic. You don’t want to spend hours creating and editing videos on a topic only a dozen people are searching for in a month.
YouTube is the second largest search engine, and you want to rank on it as well.
The fundamental idea is similar to that of ranking on Google; however, it’s a different platform and the strategies will differ.
Ever wondered why YouTubers always ask you to like, subscribe, and comment?
YouTube’s algorithm is designed to recommend videos similar to the ones that you’ve watched or liked in the past.
Moreover, YouTube has a subscription bar on the left of the screen that shows the channels people have subscribed to along with their number of new releases.
The higher the number of subscribers, the higher the number of viewers.
Start a blog (organic traffic)
Affiliate marketing through blogging is a common online business model, but it is far from being easy.
But if you play your cards right and are truly passionate about what you’re writing, there’s a good chance you’ll at least make an above-average income out of it.
What’s the starting cost?
With just the following three things, you can create an affiliate marketing blog:
- Domain name
- Autoresponder (software used to automatically answer emails)
You can buy a domain name for $9 to $12 a year from Namecheap and a hosting for $12 to $25 a month (dedicated hosting costs a lot more because of added technical support). Moreover, you can get a monthly subscription of an autoresponder for $15.
So, you can start your affiliate marketing career with blogging with just $35 to $50.Note: You’ll need to add more costs of writers (for editing or additional content), A/B testing, social media campaigns, technical support, etc. as your business begins to grow.
How to create your blog for affiliate marketing?
Select a niche
You should only select a niche you love, period.
However, if that niche:
- Is high in demand
- Has a good number of products
- Has an audience that is eager to buy
That’s a plus.
Create great content
The basis of affiliate marketing is content.
Your content should be interesting, informative, engaging, compelling, and valuable to the readers.
And to make such content, you need to be passionate and highly knowledgeable about the niche you’re in.You’ll need to be active in forums and follow other bloggers and influencers in your niche to be on top of the current trends. This will give you insights on what’s the talk of the hour, what people want to know, and you can create your content around such topics.
Do what others are doing, but better
Follow the top-tier influencers and bloggers in your niche. See what they have shared, if it is something that has gotten huge reach and interaction, that means there’s a demand for it.
Now that you know what sells, sell the same thing but better.
You can do this by discussing the topic in further detail, you can share infographics to make it easier to comprehend, or you can imbed relevant videos, etc.
Networking is crucial to making it big in this business.
If you are commenting and sharing other people’s content, there’s a good chance they’ll return the favor and help you grow.
If your content is not visible to the target audience, no matter how well it is written, no one will read it.
The best way to promote your content is to be active on forums and social media handles related to your niche.
Answer queries, share insights and interact with others to gain more visibility.
Guest posting (writing on someone else’s website/blog) is another great promotion tactic.
There’s little chance that you’ll make any income in the first few months of starting.
Most people bail out in the first few months because they aren’t able to generate the amount of income they thought they would.
But if you remain persistent and generate content with consistency, you are sure to make a considerable amount of passive income out of it, sooner or later.
And the only way you’ll remain persistent is if you are working in a field that you’re truly passionate about.
Build an email list
Building an email list should be among your top priorities.
The thing with emails is that it helps you remain memorable to your customers through scheduled emails that provide value.Email campaigns help you build trust and a strong relationship with your audience, if done right.
Creating content marketing strategies, working on the content, link building, promotion, email campaigns, etc. all take tremendous effort and time to start showing results. If you are looking for more specific info on these topics, I suggest checking out this affilate maketing guide with more advanced topics.
However, the process can be fast-tracked a bit using paid advertisements.
Note: Paid ads are not a replacement for organic growth, but it helps to have a paid ads strategy while you’re working on your content.
It’s wrong to think that once you create a stellar ad, write the perfect copy, and target the right keywords, the money will start rolling in.
Even though that’s how it works in theory, practically there are a lot of hurdles that come in the way.
The greatest problem with paid ads is that you are targeting a cold audience with zero buying intent. Moreover, you have not yet built your trust with the people to ask for a purchase.
Therefore, a practical paid ads strategy is crucial for success.
Here are a few considerations:
For your Facebook ads to run successfully, you must know your buyer persona which would include gender, age, locality, interests, etc.
But even if your buyer persona is on point, directing them to a sales page won’t work. The problem lies in the fact that you are targeting a cold audience.
The best strategy should be to direct them to something of value.
Your aim should be to get them tagged by Facebook Pixel (software used to tag visitors for remarketing) and move them through the sales cycle.
Facebook Remarketing Ads
Now that you have tagged your visitors through Facebook Pixel, you can start remarketing (sending ads to people who have visited your website).
Since these visitors have already visited your site and shown interest, you can direct them to your converting pages (sales pages).
The kinds of ads you send to these visitors can be adjusted individually according to the pages they visited and what they did there.
Google Search Ads
Google search ads work by bidding on keywords.
This bidding is further divided into:
First-page bid estimate: bidding to be shown on the first page of Google SERP (Search Engine Results Page)
Top of page bid estimate: bidding to be shown among the top ads on the first Google SERP (Search Engine Results Page)
First position bid estimate: bidding to be shown at the top of other ads
Again, people usually direct visitors to sales pages using Google search ads, which is a flawed strategy as these visitors have zero buying intent.
A better strategy is to target low competition, long-tail keywords with intent to get Pixeled visitors (for remarketing) or email addresses for email campaigns.
Budgeting for paid advertisement
Several factors come into play when deciding the budget of your paid ads campaigns, such as:
- Target locality/currency
- Target keywords
You need to do a fair bit of research on the above factors to estimate your paid ads budget.
Google paid ads are charged through the following two models:
- CPC model (cost per click)
- CPM model (cost per mile/thousand impressions)
- Use the CPM model to increase visibility.
- Start with a lower budget and keep on testing and optimizing based on their performance.
Now that you have a basic understanding of the three main affiliate marketing models, you are in a better position to weigh the pros and cons of each model and decide which model works best for you.
But whatever model you choose to go with, remember, persistence is the key to success.