What Is Affiliate Marketing?

Do you need more sales, but you only want to pay for results? Do you think affiliate marketing might be the answer, but you’re not sure how it works? Digital Media Solutions is here to help. In this article, we’ve answered five of the most-searched questions about affiliate marketing. Click on your question below to see the answer.

1. What is an affiliate marketing program? 
2. What types of affiliate marketing are there? 
3. How do you pay for affiliate marketing? 
4. What types of promotions do well in affiliate marketing?
5. What’s the best way to launch an affiliate marketing campaign?

1. What is an affiliate marketing program?

Affiliate marketing programs are a type of performance marketing for which a publisher promotes a product or service and the advertiser pays the publisher a commission when an agreed upon action takes place, often a sale. This type of payment is called “cost per action” or CPA and is beneficial because advertisers pay only for actual results and not for the media expenses accrued to achieve those results. 

2. What types of affiliate marketing are there?

While affiliate marketing can be performed using any marketing channel, the primary types of cost-per-action media distribution happen across these digital channels:

• Email and newsletters 
• Paid search
• Display advertising
• Social media
• Blogs and forums
• Consumer reviews
• Retargeting
• Pay-per-view (PPV) and contextual advertising
• Mobile marketing

3. How do you pay for affiliate marketing?

With cost-per-action (CPA) based affiliate marketing, advertisers make their campaigns available for placement through a network of digital publishers across online and mobile channels. But instead of paying upfront for media expenses, advertisers pay commissions to publishers for the actual conversions (or actions) they deliver. The conversion can be sales, completed lead forms, subscriptions, sign ups, downloads, video views or any other measurable consumer actions.

4. What types of promotions do well in affiliate marketing?

Affiliate marketing can be effective at achieving measurable, performance-based marketing objectives, including consumer purchases, completed lead forms, member signups or trials, software or mobile app downloads, video views and site registrations. Exclusive, limited-time offer promotions can be successful with affiliate marketing because they give the consumer a reason to act now.

Affiliate marketing advertisers come from a long list of industries, including education, travel, insurance, mobile, health and beauty, gaming, weight loss, finance and dating.

5. What’s the best way to launch an affiliate marketing campaign?

There are five steps required to launch an affiliate marketing campaign:

1. Choose the desired action: Set the goal for your advertising campaign. The goal must be measurable and should be tied to your overall marketing or business objectives. Examples include: consumer purchase, completed lead form, member signup or trial membership, software or mobile app download, video view and site registration.
2. Set the payout: Based on your business model and acceptable cost of acquisition (COA), your comfortable payout amount should be determined. The payout amount or cost per action (CPA) should be equal to the value you set for each conversion, and it should assure positive ROI for your campaign.
3. Choose channels and set restrictions: Make sure you can specify the media channels for which you want your offer and/or brand placed. Set necessary restrictions, including non-permissible keywords.
4. Distribute your campaign: Typically this is completed by an affiliate marketing network, like DMS Performance Ad Market. According to guidelines set, affiliate managers of the affiliate network push out your advertising to targeted publishers within their CPA affiliate marketing network.
5. Track conversions: Affiliate marketing conversions are tracked with cookies and tracking pixels. Affiliate marketing networks reconcile tracking to determine the number of targeted actions achieved and calculate the payout amount. Affiliate marketing advertisers pay only for results.

Acquire Customers Online. Pay Only For Results.

The team at Digital Media Solutions (DMS) loves helping marketers drive performance-based marketing results with affiliate marketing campaigns.  Acting as a point of connection between leading advertisers and successful, high-quality publishers, DMS helps businesses grow by sourcing new quality customers through more channels than advertisers can reach on their own.  Contact DMS today to take your affiliate marketing to the next level.