The Power of Performance: Marketing in Today’s Digital World

Posted on Jul 17, 2018 - By Leesa Love

The world is going digital, and business is following suit. Ecommerce is growing in accessibility and influence every day, offering an almost infinite number of products and services at the click of a button. New companies are continuously expanding the world of online business, in an effort to compete for customers all over the globe. Consequently, it is more vital than ever to stand out in the market, which is where marketing emerges. In today’s world, having a great product is not always enough to succeed. Successful online businesses know that finding an effective marketing strategy is the key to survival in the ecommerce sphere.

With this in mind, advertisers are always looking for innovative ways to reach their audience without risking profit. Affiliate marketing is one such strategy that is quickly becoming popular among advertisers. This approach to marketing establishes a relationship between businesses and affiliate groups, a partnership which benefits both parties. Affiliates promote the products to their audiences, and, in return, earn a commission when their marketing leads to a sale. With costs based almost solely on performance, online merchants across industries find success through affiliate marketing. Companies like Amazon and eBay have mastered this marketing technique to become highly influential in the online market, and it’s easy to see why.

The Future Is Affiliation

Affiliate marketing is on the rise for a few different reasons. The overarching cause is that affiliate marketing improves upon the traditional marketing model. In traditional online marketing, advertisers rely heavily on the success of their ads in order to garner consumer attention. Businesses pay for internet ads hoping that consumers will click on them and make a purchase. Achieving this result requires a lot of time and investment to experiment with different marketing techniques. And online merchants risk losing money if these techniques are unsuccessful. Unlike in traditional marketing, this new method shifts the bulk of the responsibility away from the advertisers and the business.

With affiliate marketing, the main focus is on the performance of the affiliates and their marketing strategies. Affiliates are individuals or groups who have agreed to market products for a business on their own online platforms. These affiliates, also called publishers, are responsible for drawing in consumers and encouraging them to purchase the advertised product. Another benefit of this marketing approach is that advertisers are able to track consumer habits and preferences more easily than in traditional marketing. This data allows businesses to see clearly which affiliates and marketing strategies are achieving the best results. Moreover, businesses can even stretch brand exposure far past the intended audience with the help of affiliates.

It’s Not Just Who You Are – It’s Who You Know

Normally, advertisers have to worry about targeting the specific audience meant for their product. This is more difficult with traditional marketing, because it takes additional time and effort to track a targeted audience. This type of marketing aims to place ads where they will hopefully be seen by the right user, but there is no strict guarantee.

With affiliate marketing, a target audience is part of the package. Individuals who become affiliate marketers often already have their own audience that they promote to. These brand influencers, bloggers and social media gurus base their following on a shared interest or niche market. By interacting with their followers daily, a mutual relationship is established. The publisher learns what the followers respond well to, and in turn, the followers trust the publisher to promote worthy products. Affiliate marketing takes advantage of the idea that users would rather try a product that comes highly recommended by someone they trust.

A byproduct of this is that the affiliate’s audience and the product’s intended audience do not always overlap perfectly. Through this, advertisers are able to spread brand visibility with a high likelihood of obtaining new customers.

In order to gain access to these lucrative target audiences, you have to make it worthwhile for the publisher. In affiliate marketing, an affiliate earns a commission every time a customer is drawn to the site and subsequently interacts with the ad in some way. This model based on sharing revenue incentivizes affiliates to market the products well. On top of all that, there is little to no risk in this approach to marketing, because businesses only pay for the strategies that work.

The True Value of Affiliate Marketing

One of the most convincing reasons that has advertisers using affiliate marketing is that it is proving to be one of the most cost-effective approaches. This might seem counter-intuitive given that a portion of profits are paid to the affiliates. However, affiliate marketing utilizes a performance-based payment structure. This means that businesses only pay for advertising that generates the results they want. Desired results are defined as a customer interacting with the advertisement in some way and include:

  • Cost per mille (CPM): Advertisers pay each time a user accesses a webpage where their ad appears.
  • Cost per click (CPC): Advertisers pay each time a user clicks on the ad and is directed to the merchant’s webstore.
  • Cost per acquisition (CPA): Advertisers only pay when clicking on the ad leads to further action, such as a user making a purchase or filling out a form.

Paying for all of the above options is more cost-effective than traditional marketing, because instead of paying for advertising up front, merchants only pay for what works. Results-based advertising like this allows businesses to spread their marketing investments more widely and increase the ability to collect profits. Affiliate marketing is low-risk, high-reward advertising for the future.