Affiliate Marketing Basics
This is the first of a three-part tutorial series that is going to focus on how you can take your affiliate marketing activities to the next level. In particular, the tutorials will focus on how you can maximize your profits from affiliate marketing.
To get started, let me give you a very quick overview of what affiliate marketing is all about to ensure that we are on the same page from the beginning.
The basic idea of making money as an affiliate marketer is that you take a product or service that someone else has created or is selling and promote it on their behalf. When a visitor that you deliver to the offer takes the required action, the product creator/owner makes money.
When they do so, you are paid a proportion of their revenue as a commission.
There are many advantages to the affiliate marketing business model.
For a start, you can become an affiliate marketer almost instantly as you do not need your own product or service to sell.
Furthermore, it is not absolutely necessary to have a website of your own either, although in many situations, it is advisable to have your own site as you will see.
Nevertheless, the fact that you can market without a site means that it really is possible to start making money as an affiliate within five minutes of deciding to do so.
Another advantage of affiliate marketing is that you don’t need a great deal of money to get started either.
In fact, if you have some time on your hands, you can promote your business completely free of charge. You can therefore start generating an income before spending any money.
This does not however mean that affiliate marketing is a free business.
On the contrary, because there is always a measurable ‘cost’ in terms of either cash or your time, one disadvantage of affiliate marketing is that if you don’t make any sales, you are down on the deal.
Nevertheless, as long as you understand this and tailor your marketing efforts and approach accordingly, promoting as an affiliate can be an extremely profitable business.
In general, affiliate marketing is most commonly seen as a beginner’s business, something new online marketers get into before moving on to other things.
This impression is however misleading as many extremely experienced online marketers still make lots of money by promoting products as an affiliate.
Indeed, there is an elite group of affiliates (sometimes called the ‘super affiliates’) who regularly make millions of dollars every year through their affiliate marketing efforts.
There is therefore no way that affiliate marketing is a business for online beginners only.
This is a fact that will be emphasized throughout this tutorial series.
In fact, what you have read so far is designed to be nothing more than a recap of some of the basics of affiliate marketing that I am sure you already know.
However, now that I am certain that we are singing from the same song sheet, let’s start to crank things up to the next level.
Most affiliate marketing beginners tend to approach their online marketing activities as a hobby or as a pastime that can be picked up and dropped again as when they see fit. This of course is not true of every affiliate marketing beginner, but it certainly covers the majority of affiliate ‘newbies’.
Consequently, the first thing that you must do if you have not already tackled this is to start treating your affiliate marketing activities as a very serious business. It shouldn’t need stating, but anything that generates an income for you is a business and needs treating as such.
If on the other hand you treat affiliate marketing as a hobby, it will always pay you a hobby level income.
Furthermore, one of the big differences between affiliate marketing greenhorns and super affiliates is the approach that the respective parties adopt to their online marketing activities.
I’m not talking about the amount of hours they work or the fact that one works at home in the evening whilst the other has an office and 100 permanent staff who all work full-time either.
Instead, I’m talking about professionalism and treating affiliate marketing as a professional business venture.
For example, if you were to ask the average affiliate marketer for exact statistics about a current advertising campaign they are running, the majority of them could not tell you off the top of their head. They would be able to find out but they wouldn’t know otherwise.
Do you imagine a super affiliate would be the same?
The answer is, of course they wouldn’t.
On the contrary, they would be able to tell you the exact statistics for every campaign they are currently running. From experience, they can probably tell you the statistics for campaigns that they were running six months ago as well.
This is a sure sign that they run their business as a respectable, professional business.
And it is surely no coincidence that these people are super affiliates who earn millions of dollars when there’s so many would-be affiliate millionaire’s still struggling to make their first $10.
In short, whether you run your business from an office or from home, part-time or full-time, it is absolutely essential that your business is run as professionally as possible.
To begin with, you must have a proper written business plan. This business plan must have a clear goal too.
As an example, your objective might be earning $20,000 a month from affiliate marketing in one year from now.
Once you know this, you are in a position to work backwards to establish a monthly or even weekly schedule of everything that needs to be done to achieve your target.
All of your records must be kept detailed and up-to-date for everything you have done and everything you are currently doing.
Furthermore, you must have your finger 110% on the pulse of every marketing campaign you’re running so that you know exactly how much you are spending on and how much you are earning from your affiliate marketing activities to the cent.
Most importantly, you must plan to use every second of every working day as profitably as possible if you are not already doing so.
For example, you know that when you first started out in affiliate marketing, you had to do everything yourself. You were the marketer, you were the customer service specialist, you wrote the sales letters and you probably created every piece of marketing copy as well.
However, that was then, this is now.
Now it is essential that you focus as much of your own time and efforts on doing the things that bring money into your affiliate marketing business.
For example, you should outsource your article writing, your customer services and the like instead of continuing to do these jobs yourself.
This frees you to spend all of your time marketing which is what brings in the money and takes your affiliate marketing business to the next level.
It’s just professionalism, right?
After all, you don’t call customer services at Microsoft and end up talking to Bill Gates or Richard Branson when you call Virgin.
Your business should be run in exactly the same way. You are the boss and you do what bosses do which is drive your business to success. Everything else should be left to others.
There are literally hundreds of different product and service manufacturers, creators and suppliers who are looking for active, professional affiliates who can market their products and services for them.
There is therefore no shortage of affiliate opportunities available.
You probably did the same as there are many advantages to promoting information products when you first start out.
When taking your business to the next level, it does not however mean that you should leave information product marketing behind completely.
On the contrary, there are still thousands of dollars on the information product marketing table waiting for you to collect. This is a point that we will return to on several occasions in these tutorials.
Nevertheless, when you are looking to expand your affiliate marketing activities, one way of doing so is to look for additional affiliate opportunities from other leading websites.
Sign up for either program and you can add an eBay or Amazon ‘store’ to any website you own and get paid for all successful sales.
There are physical product network sites like Commission Junction, Share a Sale and Link Share. Each of these networks feature hundreds of physical product suppliers and manufacturers looking for affiliates.
Finally, you have CPA offers, offers where instead of a sale, you need to persuade an individual to take action (e.g. signup for a free trial offer) in order to generate a commission payment.
When people don’t have to spend money in order for you to earn, it is sometimes easier to generate an affiliate income.
Consequently, CPA is one option that you might like to consider. If so, start with sites like Commission Junction and the like which feature many ‘pay for leads’ offers as well as products for sale.
If however you continue to focus on promoting ‘for sale’ products as an affiliate, there is one undeniable truth that you must always bear in mind.
No matter what market you operate in, you must always promote products or services that people need or want to buy. If you are selling in a market where there are already thousands of buyers, you will always make money with every campaign.
It is therefore essential to establish where consumers are spending money before launching into any affiliate marketing campaign.
There are many ways of getting this information. These are amongst the easiest resources to establish what Internet users are spending on.
Amazon.com – Open the Amazon.com homepage, click the ‘Books’ link on the left and ‘Books’ again:
When you search by keyword term, the number of books shown indicates how popular a particular market is whilst the price tells you how much consumers are willing to pay for the solutions they need.
Sometimes, you can see the ‘Table of Contents’ for individual books too. The headings give you a great idea of the specifics of what people are looking for.
Are there magazines in the market? As magazines are funded by advertising, you know that if there are magazines in a market, money is being spent and made.
A keyword search of a site like magazines.com gives you an idea of how popular your market is.
If for example you were thinking of promoting a parenting product, you would see 21 parenting magazines listed. This tells you that there are many parents spending money on magazines to find the answers they need.
eBay Pulse: The Pulse page shows the most popular searches on eBay in the previous 24 hours. The homepage features the 10 most popular searches overall whereas opening the drop-down menu above the list presents you with the top 10 in each category:
If it’s popular on eBay, there’s money being spent.
Clickbank: To establish what kind of information products people are spending money on, go to Clickbank. Search the site for appropriate products by keywords or by clicking a ‘Category’ on the left side of the ‘Marketplace’ page:
These for example are the top products in the ‘E-business & E-marketing’ category ranked by ‘Popularity’:
If you know where people are spending, you always know that there is an opportunity for you to make money as well.
Once you know this, you are ready to start promoting products which we will consider in the next two tutorials. Before then, there are a few more important factors pertaining to the way you run your business of which you must be aware.
There are lots of ‘hidden pitfalls’ associated with affiliate marketing that many would-be successful affiliates never become aware of.
The following are amongst the most common mistakes that hold affiliate marketers back.
1 – Far too many affiliates focus all of their efforts on promoting just one product or service. They find a product that they are completely convinced is a surefire winner and they keep working it for weeks and months despite the fact that a distinct lack of sales clearly suggests that their initial assumption was wrong.
The fact is, you will not get product selection right every time. Even super affiliates know that out of every 10 campaigns they launch, maybe 2 or 3 will make money. There might be one more that breaks even, but 5 or 6 will make nothing.
In this case, it is imperative to drop the losers as quickly as you can so that you can put all of your resources into cranking up the winning campaigns.
This is why being professional and tracking your stats is so crucially important. The sooner you can drop the losers and channel your resources to amplify your winning campaigns, the more money you inevitably make. This is how the super affiliates maximize their profits, and you should do the same.
2 – Direct linking (i.e. sending prospects directly to the original product creators sales page) is all very well when you are a beginner but it’s not something that you should do further down the line except in certain circumstances.
On the contrary, you should be pointing almost all of your promotional materials at your own pages. This enables you to build a recognizable brand of your own, to create a prospect mailing list and to present the kind of professional image to your prospects that you must portray.
As suggested, you should point almost all of your promotional links at your own pages, however there are certain situations where direct linking does make sense.
For example, if you want to test a new marketing campaign, you might do so with direct linking first. Similarly, if you wanted a new campaign off the ground in double quick time, direct linking is the way to go.
In both of these cases, if the campaign goes nowhere, you can drop it without causing yourself too much work. If however it takes off, you can then start building your own pages to take maximum advantage of your success
3 – In any situation where you direct link to the original sales page, the URL you use must look professional. Furthermore, it must be cloaked as well to protect your commissions from unscrupulous commission thieves.
One way of satisfying both of these requirements is to feed the direct link through your own site, using your URL to ‘hide’cloak the affiliate link that you are using.
4 – Try to avoid following what is seen as the accepted wisdom all of the time. The reason that something becomes accepted wisdom is because everyone is doing the same thing.
And of course, if you follow the crowd, it is far more difficult for you and your business to be a standout for your prospects.
Don’t lose sight of the fact that it is the online marketers who are able to stamp their personality and character on their business and the way they deal with prospects and customers who earn the most money.
This is for example one of the main reasons why you need your own websites. Through your own site, you can stamp your personality on your business and market it in a way that enables you to ‘connect’ with your prospects and customers.
As a simple example, a self-hosted WordPress blog enables you to publish video materials on your site. Videos are by nature a far more direct, personal and therefore effective communication tool than written words on the page can ever be.
One downside of affiliate marketing is that because every affiliate who is promoting product ABC has exactly the same product to offer, you have to do whatever is necessary to stand out from the unwashed masses.
Having your own site allows you to brand your business and to become a ‘real person’ with whom your prospects can communicate as opposed to being just another faceless online marketer.
5 – In a similar vein, some markets are incredibly competitive.
This by definition makes it harder for an individual affiliate to make money in these particular markets. For example, every time there is a big Internet marketing product launch, every ‘guru’ and his (or her) dog jumps on it.
In this situation, there are hundreds or thousands of affiliates all fighting against each other for the same piece of the pie.
For this reason, there are times when it makes sense to avoid trying to fight in markets that are too competitive. There are hundreds of different market niches where there are plenty of willing buyers, so it doesn’t always make sense to fight against the big dogs in the most popular markets.
Finding products or services that you can promote as an affiliate is one of the easiest parts of setting yourself up as an affiliate marketer.
It is however crucial to appreciate that once you have successfully negotiated your first affiliate marketing steps, it is necessary to ‘up your game’ if you are to successfully take yourself to the next level.
For example, professionalism is something that you must focus on.
At the same time, you cannot lose sight of the fact that affiliate marketing is a very serious business (as is any business that could earn hundreds of thousands of dollars a year).
Finally, don’t allow yourself to make any of the fundamental errors highlighted in this tutorial. Any one of them could potentially kill your business, so they have to be avoided.