Using affiliates to make noise about your brand

Generating online conversation for your brand is often a task that see digital marketers focussed entirely on their own assets: the piece of content they want to promote, their own website and their own social media channels.

When we mention the idea of affiliate marketing to push the messaging out, there is typically little working knowledge of what an affiliate is and how it works.

“What, you mean a blogger?” is a common response. A blogger might be considered an affiliate insofar as they can be your brand ambassador and ultimately endorse your content, products and services. However, the affiliate marketing channel is an entire discipline in its own right and has developed in sophistication over recent years.

In what follows, we’ll examine why you might consider the use of affiliate marketing, how it works and what you’re likely to gain from using this channel. We’ve even included an example forecast to make things a little more concrete.

What is affiliate marketing?

Affiliate marketing is the use of other websites to promote your website, your products and your services. Typically, this is done through banner advertising, but it can also be done through reviews, hosted competitions or a simple text link. We call the affiliate websites “publishers”, whilst we call the original website the “merchant”.

How does affiliate marketing work?

Almost all affiliate marketing falls into the remit of performance marketing these days. This means that the cost of the marketing is almost risk-free, since it’s based on what we call a cost-per-acquisition (CPA) model. In short, you only pay when you make a conversion from the visit that your affiliate or publisher generated for you. You do not pay for clicks that don’t convert, nor do you pay for impressions.

The money you pay out to your publisher is typically 5% to 10% of the transaction value, which, when you do the maths, leaves you in profit, if your affiliate base has attracted previously untargeted traffic.

The industry has worked very hard to eliminate click fraud and to implement validation processes through networks, which means that you won’t pay out on refunded transactions.

What is the role of an affiliate network?

At first glance, managing your affiliate activity via a network can seem pricey. However, the deal becomes a lot sweeter when you consider that the network will help you recruit affiliates, expose you to all of the existing affiliates on their books, deal with validations and provide performance reporting.

How much will an affiliate network charge?

The answer to this question truly varies. The premium networks can charge up to £5,000 for set up. On a monthly basis, they will charge a percentage of the commission that you paid out to your affiliates, which, in itself, is quite negligible. However, you must beware of the minimum override fee, which ensures the network a certain level of remuneration should their cut of commissions prove to be too low.

Put off? Don’t be. At Brazen, we’re all about building great relationships, and have partnered with a superb affiliate network, whose set-up costs are waived and whose monthly fees operate at a flat 8% of commissions paid out to affiliates. Great value, all in all.

How do the maths stack up?

Say, for example, you advertise rooms for your hotel and have launched a campaign to attract people to the superior rooms, with a higher transaction value. Your average stay in such a room comes in at £400

Transaction: £400

Affiliate commission at 10%: £40

Network override at 8% of affiliate commission: £3.20

Total cost incurred: £43.20

Revenue: £367.60

In conclusion

Affiliate marketing is perfect for an overall marketing strategy or campaign promotion, due to its CPA basis. It can be dialled up or turned down as is necessary. If you feel that you’re struggling to reach a latent market, reach out to your hidden audience via the assets of your affiliates. The results might just surprise you.

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