MaxWeb Blog

The Pros and Cons of Affiliate Marketing

Become an Affiliate

Affiliate marketing is beloved by affiliates and product owners. The owners love that their product is being marketed by a lot of people. The best part of it is that they only have to pay if their campaigns are successful. This goes into stark contrast with the traditional ad agencies. How it used to work is that you pay a lot of money to an agency. They then create a campaign and promote it. If they do their job right, you will see a lot of sales and revenue. If their campaign fails, your investment has been completely wasted. With affiliate marketing, the owners only pay commission for successful sales. So there is no worry that they will pay for campaigns that flop.

On the other hand, affiliates love it because of the lack of responsibility for the product. All they have to do is advertise and sell it. Logistics, shipping, customer support, and investing are all done by the product owner. So in reality it makes both parties happy. But of course, this type of marketing isn’t best suited for every situation.  


What Is Affiliate Marketing?

Affiliate marketing is a type of marketing. In it, the affiliate advertises and sells products that others own for a commission. Usually, the process looks like this.

  • A merchant or owner makes their product available for affiliate marketers
  • Affiliates find and pick offers that they want to promote 
  • Affiliates create ad campaigns to promote said products
  • Affiliates get a commission of each sale they manage to create through their advertising campaigns

Affiliate marketing is beloved by affiliates and product owners. The owners love that their product is being marketed by a lot of people, that they only have to pay if their campaigns are successful. This goes into stark contrast with the traditional ad agencies. How it used to work is that you pay a lot of money to an agency. They then create a campaign and promote it. If they do their job right, you will see a lot of sales and revenue. If their campaign fails, your investment has been completely wasted. With affiliate marketing, the owners only pay commission for successful sales. So there is no worry that they will pay for campaigns that flop. 

On the other hand, affiliates love it because of the lack of responsibility for the product. All they have to do is advertise and sell it. Logistics, shipping, customer support, and investing are all done by the product owner. So in reality it makes both parties happy. But of course, this type of marketing isn’t best suited for every situation. 


When Should You Use It?

Affiliate marketing can be a great idea for some since it has a low cost to get started. The great thing for merchants is that they only pay for results. Before creating affiliate programs, merchants should see how much they need to invest to create them. Every program needs some kind of support. Whether it be creatives, guidelines, or a tech guy to keep track of everything. This can be a decent investment in the start but some smaller merchants might not be able to finance it. Affiliate marketing also has the chance to change your product message and values. Affiliates market in their style, and brand consistency is hard to achieve because of it. This can be somewhat mitigated by strict guidelines. 

Deciding whether to advertise a product as an affiliate is a bit different. You should research the audiences, potential reach, and potential profit of each campaign. If you conclude that you can make a campaign profitable, you should research it further. Find out anything you can about the product and the people behind it. Remember, your name is on the line as well. Famous affiliates didn’t get famous because they scammed their audience. They got where they are because they were transparent, honest, and good at what they do. 

Try finding products within your niche for audiences that you already have. The stronger your connection to the product itself is the better the ads will work. You also need to add some extra value to your audience. Most likely you won’t be the only one running affiliate links for a specific program. So make sure you give your audiences something extra. Better info, a more interesting copy, or anything else. Don’t forget to take things slow as well. Rarely will affiliates see immense growth in a short period of time. It usually takes weeks or even months to get your campaigns optimized and profitable. Make sure you nurture your relationship with your audience in the meantime. Be honest with them and never try to trick them. You can also work on your relationship with your merchant. Some companies have special deals for their best and most trusted affiliates. 


What Are the Positives of Affiliate Marketing 

Brand Awareness for Product Merchants

The biggest advantage that affiliate marketing can bring is brand awareness. There is never only one affiliate advertising a product. It’s always many affiliates that try to one-up each other and create the best campaign. This can lead to a large spread of information about your product. Even if people don’t buy the product the first time they see it, through repeat ads they will start recognizing your products and brands. 

Sales 

Merchants and affiliates tend to love the sales they get through affiliate programs. For affiliates, the sky's the limit. The better campaigns they make the more they earn. Merchants on the other hand love it for the chance to reach a wide audience and sell a lot of products. 

Cost-Effectiveness

Both merchants and affiliates find affiliate marketing cost-effective most of the time. Merchants love it since they only pay for results. Once you figure out how to start and recuperate the initial costs, it is impossible to operate at a loss. Affiliates on the other hand don’t need to worry about managing, producing, and shipping. Things that would eat into their profits. 

Customer Data and SEO 

One of the biggest advantages affiliate programs provide is the incredible data. Merchants usually know what their audience looks like. But affiliates analyze and research this in much bigger detail. They do this so they can improve their targeting. This leads to a lot of customer data that affiliates and merchants can use in future campaigns. 

Another big advantage that affiliate programs bring to the table is SEO optimizations. Affiliates usually link their ads and landing pages to the merchants’ websites. Unless they are making spammy and shady pages. These links should provide a nice boost to your SEO efforts. Inbound links are a huge ranking factor in Google’s eyes, and affiliate links make it much easier. With this, merchant pages should rank much better in general. Merchants should get a nice boost in their global visibility. 


What Are the Negatives of Affiliate Marketing

Control Over The Brand

One of the biggest fears that merchants have with affiliate marketing is that they will lose control over their brand. When affiliates get to advertising, they often use unconventional tactics. Their goal is to sell your product, not to make you long-term customers. This means that they sometimes lie, or do things that might hurt your brand image in the long term. Affiliates don’t have the obligation to follow your brand values or image, and this can lead to issues. 

Some merchants thus create extensive rules for their affiliate programs. This is the only way to limit misuse of your brand and image. But it’s hard to pull off properly. Merchants need to think about the style, in writing, copy, and advertising. This requires extensive guidelines that need to be created and followed. Monitoring all of your affiliates on bigger programs is near to impossible. 

Cost

Not all affiliate programs are successful. For merchants, these programs require a bit of upfront investment. Developing a full affiliate program is hard. Creatives, materials, guidelines, tip sheets, and everything needed can take a lot of time and money to do right. These programs also need to be run by people who have experience with managing them. Since a lot of things can go wrong. 

For affiliates, the story is a bit different. If they chose a bad or unpopular product. They might spend a lot of time and money on advertising something that won’t net them anything in return. Affiliates usually have it a bit easier since they can track things in real-time. If they see their campaigns are not making any money they can simply stop advertising for them. 

Another thing that can be an issue for affiliates is the time needed to see profits. You can spend weeks optimizing campaigns until you see some money flowing in. This can be disheartening for beginners but the pros are used to it. 

Time

As the famous quote says, time is money. Similar to the cost section, the time has the same issues. Affiliate programs need a lot of time to create and optimize. Issues need to be ironed out and problems need to be spotted. All of this requires some time. For affiliates, the biggest time issue is with failed campaigns. They need time to set up their campaigns, creatives, copy, pages, and sales pitches. If the campaigns are complete flops, that’s their time and money going down the drain. 

Brand Awareness for Affiliates

Unlike the merchants, affiliates aren’t too keen on creating brand awareness for their products. Merchants only pay for specific goals reached. If affiliates don’t meet these goals they don’t get paid. But through their advertising, they usually pay a lot for product promotion. If they don’t make sales, this brand awareness campaign comes out of their pocket and they make nothing from it. The merchants enjoy a mostly free brand awareness campaign which is great for them.


So To Wrap Things Up…

Affiliate marketing can be great for affiliates and merchants. Sometimes, when they understand each other and work together this can lead to incredible success for both parties. But sometimes it just doesn’t work out. Merchants should research how much everything costs before launching their affiliate programs. They should also consider how much it can change their brand image. 

Affiliates on the other hand need to pay attention to their reputation. They need to stay honest, advertise products that work, and always keep improving. Affiliates can run into issues like slow returns on investment, security, managing issues, and a whole plethora of issues. But they shouldn’t be discouraged. Everyone needs time to adjust and once they get the hang of it, they can make a nice living off the business!