Affiliate Marketing Defined

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Affiliate Defined:

Affiliate marketing, also now known as performance marketing, has a straightforward meaning.  It has many different applications that cover all aspects online marketing, particularly in lead generation.  This makes it a popular marketing channel that makes up some 20% of all online acquisition efforts when properly implemented. 

By specific definition, Affiliate marketing is the process of passing clicks or conversions from a website publisher to a vendor website.  The vendor can sell a product or service to the click.  The vendor pays for the referring website for this prospective customer in a few different ways.

Confusing?  Let me break it down step by step in a digestible format. 

Example

For full transparency, I have no affiliations with Business Insider outside of meeting their affiliate head at CJU.  He seemed like a good enough guy for the five minutes we talked.  I was never able to get them to promote the smaller driver’s education brand I represented at the time so we’ve never done any business together.

I also don’t have any relationships with Leesa, though they are notorious for their part in the mattress wars.  Leesa is incredible at affiliate marketing, but I have no connections to speak of with the business.  I do love watching it from afar though!

Business Insider as a company is a content stronghold and you’ve probably been on their site at some point in your life.  They’ve been media based in the business space since 2009, constantly updating articles and providing exposure for companies of all sizes with thousands of articles and interviews.  Because of this, they found that they are great at ranking for many top sales terms in search with Google. 

Their strength in search is one of the reasons they pivoted towards a strong affiliate marketing strategy. They had previously relied exclusively on AdSense.  It turns out they’re more profitable with their current strategy.  They customize the products that they put in from of their readers.  This converts and provides better leads than mass and randomly serving AdSense and pays more. 

Here’s the process:

Situation: Your back hurts and it’s beginning to get on your nerves.  You need a new bed.

You’re searching for a bed, but not just any bed.  You don’t want to go to the store to pick it up or hassle with negotiation.  You just want something that works and has good notoriety.  You want something easy. 

Self Education through Search and Earning the Click

Because you’ve been conditioned to use google, you instantly take out an internet capable device and navigate straight to the most popular 6 letter word there is.  In the search query bar you type: “best mattress shipped to my door.” 

Really what you’re doing is allowing google to consult you on what’s best and trusting it.

Google serves you something like this:

What Search Gives You: 

In simple form, the top 3 listings are paid advertisements that google makes money on by auctioning the value of the slot and charging that rate on any click made.  Gross, advertisements.  You likely never click on these because of how they’re labled.  You skim right over them. 

The listing you first take seriously is BusinessInsider.com.  This website and the rest below it worked their butt off to get to where they are.  For some reason you know they’re reputable.

Sites rank on the first page of google because of keyword rich and engaging content, time, luck, and word of mouth.  These facets reward sites by helping them get noticed.  Getting noticed makes them money.  The algorithm kicks butt for users searching it.  Search on Google will usually give you something you want.  If it does, you come back.  They’re really good, and that’s the reason we’ve learned to trust it.

Because of where BusinessInsider is listed, you are inclined to interact. They’re #1, just like you. 

You click and get...

The Unsuspected Sale:

The internet is awesome. 

You are stoked with what you find.  BuisinessInsider provides an awesome ranking system that breaks everything down for you.  You even find a favorite mattress that looks good.  It's model name is Sapira. 

This is an integral part of the process of being an affiliate marketer.  When a click is gained, the content you provide must fit what they want.  It is imperative that it ADDS VALUE TO YOUR CUSTOMER’s EXPERIENCE AND GIVES THEM SOMETHING THEY DIDN’T HAVE BEFORE.  When affiliate marketing is done correctly, it adds value to all parties involved and everyone wins.  The vendor makes a sale, the publisher gets paid, but all of that doesn’t happen if you don’t care about your customer and what they need. 

You decide, after careful consideration, that you’re ready to check out price and potentially buy a Sapira mattress.  You click on the experience below.

Passing from Publisher to Advertiser/Vendor

You land on a Leesa product page.  Here you’re given a series of options that are normal enough for any web experience, the colors even match business insider relatively well. 

Oh look, a deal!  The banner presented even displays a limited time $200 discount and throws in a free pillow.  They had you at hello.  You feel like a winner, and you are.  The affiliate channel, traditionally, has great margins that can be shared as discount to a customer.

If you’re a serious buyer, you are considering purchasing this Casper mattress right here and now.  If it’s not going to be right now, it may be in the next week or so (affiliates get credit for referrals, usually up to 30 days past the click).  Because the entire process was crafted carefully, you never really noticed that you didn’t start on Leesa.  All you know is you came from a reputable source and you’re happy.  Everyone wins.

So How Did I Know?

Time in the space helps me spot almost every affiliate relationship these days.  If you inspect the URL parameters you are clicking, there are always hints.  When I learned this, it changed my life.

When you click on “Shop Sapia here.” you don’t see the url.  If you were to inspect, you’d find this:

sapirasleep dot pxf dot io/c/196318/316075/4841

That’s a weird URL considering where we landed, and it’s intentional.   It hides and affiliate track pattern.  We arrive at leesa dot com backslash…a lot of code jargon that you never look at.  In that jargon is this gem of a hint.

utm_medium=196318&utm_source=IR

These are utm parameters that track aspects to google analytics.  They help websites keep track of where everything comes from online.  The proof is that last little bit.  Utm_source=IR means that the source of this effort, as typed in by Leesa to report back to google analytics, is a company called Impact Radius.  This is the affiliate tracking system Leesa is using to track and pay all vendors helping them drive sales.

And that’s how it works!

Want to know more?  We cover the different payment models of affiliate channels below.