{PODCAST} In-Ear Insights: Affiliate Marketing Overview

{PODCAST} In-Ear Insights: Affiliate Marketing Overview

In this week’s In-Ear Insights, Katie and Chris take a walk on the wild side of affiliate marketing. What is affiliate marketing? What is affiliate marketing’s relationship with influencer marketing? How do you know if affiliate marketing is something to consider for your marketing mix? Tune in to find out!

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Machine-Generated Transcript

What follows is an AI-generated transcript. The transcript may contain errors and is not a substitute for listening to the episode.

Christopher Penn 0:17

In this week's In-Ear Insights, we're talking about affiliate marketing, how marketers should be thinking about it, what it is, and some of the pros and cons.

So to get started, if you're not familiar, affiliate marketing is essentially hiring other people to do your marketing for you.

However, instead of paying them a steady paycheck, you basically pay them Commission's of some kind.

So if they send you certain traffic, you might pay them per click, if they send you qualified leads, you might pay them per lead.

And there's a lot of different sophisticated software packages and companies that can do this sort of thing.

You can also install software of your own on your own website to handle it.

And the advantage of affiliate marketing is really that it gets you a large scale, what can you get to a large scale, essentially, unpaid workforce that only gets paid when you do or only gets paid when they do something that generates useful activity.

So Katie, given that backdrop, when you think about promoting something with affiliate marketing, from a strategy perspective, what's what's your take on affiliate marketing, and how useful it is? Or is not?

Katie Robbert 1:25

Well, if we'll take a step back for a second, so as many of you may know, or if you don't know, you'll find out now, I'm actually newer to the marketing field in general.

So I was only introduced to affiliate marketing, when I started working with Chris, at the agency that we used to work at, it was a term I'd never heard before coming from, you know, a more academic company, it just wasn't something that we necessarily did to promote our products.

And looking back, I think it was things that we wanted to do, we just didn't have the terminology for what it was.

And so I remember one of our clients at the agency was always talking about, do you think we're ready for affiliate marketing? Should we introduce affiliate marketing, and the team kept advising? No, you need to get your own marketing, your internal marketing straightened out first, before you start introducing other players into this space for to promote you.

So I guess when I look back and think about all those different conversations, and I was really trying to wrap my head around what it was, my first thought is, affiliate marketing can be a really useful tool, if you feel like your own assets, your content, your website, whatever the thing is, that you're asking somebody else to promote, is in really good shape.

And so I'd say that's where you want to start.

And I remember the reason we were telling this other client was because they were continually going through website versions, and the user experience wasn't super clear.

And so we didn't want them to introduce affiliates.

Because those people would then say, Oh, I'm not going to risk my reputation for not so great product.

So I'm not going to do that.

So we kept holding them back for that.

So that's sort of a little bit of backstory of where my head goes, when we talk about affiliate marketing.

So I think it's actually a really great part of your strategy.

Because what it can do is introduce a passive income stream where you yourself, you've already created the thing, you've already done the work, and someone else is doing the selling for you.

And that's actually a route, that's one of the ways that we are looking to build our business is through a lot of that affiliate marketing.

And you're right, it's basically just a commission.

So I think that affiliate marketing can be a really good strategy for your business, if the thing that you are asking somebody else to sell for you is in like, really good shape.

Like if you look at it, and you would give it like an A all around for user experience for quality for you know, whatever the thing is, then I think that affiliate marketing is a great option.

Christopher Penn 4:10

Fundamentally, affiliate marketing is all about getting to audiences that you can't reach otherwise, that so you can't get them through your email list or through the Pay Per Click ads that you're currently running.

And you want somebody else who's got an audience to direct and divert some of their audience's attention to you in exchange for getting paid on the performance.

In some ways, when you think about it, affiliate marketing really is sort of a a precursor to influencer marketing.

And I would argue that when it's done well, it is actually more effective than influencer marketing because instead of just paying for eyeballs and attention, you're actually paying that influential third party media property to send you a business result that's closer to the bottom of the funnel than that Top Right, so if you're paying per lead, you will pay more, you'll pay like $50, a lead, for example to an affiliate marketer, but if they're qualified leads, that may be substantially easier and more financially effective than paying, you know, a Kardashian to just, you know, put a post on Instagram that you're nothing, I assume for a lot of marketers a Kardash would probably not be the correct marketing channel.

But the point being the affiliate marketer gets paid only when they generate a result that you as the corporate marketing, agreed, yeah, we want more of x,

Katie Robbert 5:35

I can see where as a small business, like ours, affiliate marketing is a really great option, because to your point, Chris, you start to reach audiences that you wouldn't otherwise be able to reach.

I would imagine that there's no shortage of affiliate marketing programs out there.

So how, so if you're someone like me, and you sort of you understand the fundamentals of it, but it's not something that you've done a whole lot, you don't have a lot of experience? How do you start to vet these affiliate marketing programs to know what's good? And what's not so good?

Christopher Penn 6:09

It's a really good question.

Because there are also a lot of junk affiliates that will send you garbage traffic and, and stuff like that.

So if you're just getting started, the best thing to do is work with an affiliate network, at least in the beginning, because they tend to have more reputable affiliates not you know, not stellar.

But also they have processes in place, they have things like account managers and stuff, people, you can essentially ask for help in setting up a program, as well as making sure it stays on the rails.

So some popular networks, for example, would be things like Roku, 10, Commission Junction share a sale, there's, you know, there's so many of these different programs out there.

The other thing is, in some of these programs, they will actually have, you know, ratings, so you as a vendor can rate affiliates and vendors can rate you and, you know, obviously look for the people who get slightly more stars than others.

So there's, there are internal mechanisms for that.

And then, as affiliates are kind of like venture capital, right in the sense that you're going to lightly invest in you know, a hot worker of 100 different affiliates, and two of them are going to knock it out of the park and the other 98 are just not going to generate any activity.

If you can find who those two are you can then some networks will permit you to directly approach them and say like hey, I want to work a more exclusive deal so like if I was promoting the Trust Insights newsletter Katie and you were an outsider affiliate I might say hey this this Katie person's really generating a lot of signups you know, we're paying a buck a sign up or whatever.

I'll be like, Katie, do you want to go exclusive with US DOT promote anybody else's newsletters except ours.

And we'll pay a two bucks a sign up instead.

Katie Robbert 7:57

Interesting.

So it's a fill.

So let me give you a scenario.

So obviously, you have things like Etsy and amazon marketplace where people can go to, you know, it's more of a B2C versus a B2B.

But if I were to get my company or my shop on, like an Amazon Marketplace, or an Etsy Is that considered affiliate marketing, because people can buy directly from me, but then they can also buy from me through this other platform.

Christopher Penn 8:33

So in that case, Amazon would be itself an essentially an affiliate reseller of your stuff, right? You're putting some of the although I would call them more of a marketplace.

But then anybody who's in the Amazon Associates Program, someone like me, for example, if I got the Amazon Associates link for your storefront, and I put it in my newsletter, I would be an affiliate by proxy of you.

I would be, I'd be paid by Amazon, right for I'd be paid commissions through what Amazon generates.

But it would be your stuff.

So that's one of the reasons why Amazon has, you know, sometimes substantial fees for things for Amazon Marketplace, because they in turn have to pay their cut to the affiliates who are sharing out your stuff.

But yeah, that's absolutely one way to do it on the B2C front.

And on the B2B front, again, a network like ShareASale is going to charge a service fee or a monthly fee or something like that.

And then you pay the affiliates directly.

So if I if If Katie, you're the CEO of Trust Insights, and I've got a popular email newsletter, I would sign up with ShareASale as an affiliate, I go in, I look at see, hey, look, this Trust Insights company looks really cool.

I would submit to be approved by the program and if you approve me, I would get some links.

I could put those links in my newsletter.

And then every time I generated a result, you know, come the next month billing cycle.

Trust Insights would get a bill for you know, however much it was its affiliates, and then it Share sell would essentially cut me a check saying, Hey, you generated 50,000 signups.

And so you get $5.

Like, yes, I can, I can pay for beer.

Katie Robbert 10:12

You haven't had beer in a while have you? I really haven't.

You know, it's interesting.

So I'm sort of seeing the two different sides of it in terms of being able to generate revenue.

So one is you are taking all of these links from other people and saying, Hey, these are the products that I put that I would support.

If you buy them, I get a little bit of commission, and then you obviously get the thing from the company.

And then the other side of that is, you know, I'm the company trying to sell my thing.

Let me put it on a site like ShareASale.

And then hopefully, someone like Chris picks up the link and says, Hey, let me share this thing to my network.

So it's, it's an interesting model, and I can see how both sides of it, you know, would be beneficial to accompany, especially if you're just starting, and you're trying to be picky about things like ad space, you know, and so I know that a lot of websites in order to make that additional revenue, they'll sell ad space on their sites.

But that's tricky, because you have a little bit less control over what's shown on your website.

And so it may be a mismatch, but with this affiliate marketing program, I can see that you would have more control, because you would be picky about the things that you're willing to share, whether it be on your website or through your newsletter.

Christopher Penn 11:31

Yeah, exactly.

It's bilateral.

So you know, Katie, when you logged in as a as a brand, you're like, Ah, this Chris Penn person, like, do I really want him repping our company, probably not.

And you disclose that.

But to your point, we do that as well on the other side.

So we are affiliates.

If you look in, for example, in every week, that Trust Insights newsletter, you will see we have affiliate links to companies like Hubspot, and Agorapulse and Talkwalker.

Because we believe in those companies, we believe in the products that they offer, and they have affiliate programs that we have signed up for.

So if you click on what those links, then you go in and purchase from those companies Trust Insights receives a small commission as well, so that we can pay for our beer at the office.

But that's how, if you are a small business, and you've got an audience, that's one of the easiest ways to start to monetize audiences.

Look at the vendors you already work with and see, you know, go on their website, scroll all the way to the bottom, you know, sometimes we'll see, like affiliates or partners or something.

And if that exists, then you can sign up for their program, presumably, you're on good enough terms of the vendor to get approved for it.

And then you can start reselling their stuff until you reach a certain big enough point where the vendor may reach out to you and say, Hey, you're doing a great job generating traffic for us Do you want to move up from being just a reseller to being a full size partner or integrator or something like that, where the Commission's get bigger, and but you have to do more work?

Katie Robbert 13:01

Right? That makes sense.

And so I can definitely see, again, sort of the benefit to doing something like that, especially if you're just starting your business, and you're looking for a little bit of extra revenue from it.

So if I am at a larger company, or even just Trust Insights, how do I do I need to go through a program like a share sale to start an affiliate program on my website? Or can I just say, I can just sort of keep the control and be like, Hey, you, Chris, Penn, I'm going to give you $1 For every qualified lead you bring to me? Can I just do that? Is that considered affiliate marketing?

Christopher Penn 13:45

It absolutely is.

And there are software package that you can install straight into your website, especially if you have a CMS, like WordPress, for example, that allow you to manage that and do the tracking and the analytics, you absolutely can do that.

The reason you might want to consider a network is twofold.

One, there is a little bit more, obviously vetting.

So the quality of affiliates you'll work with, you'll have more reach that way, as opposed to having to market your affiliate program because it basically is another product at that point.

And the second thing is that when you're doing that affiliate program, you really, you need to get some reach, right.

And if you're a small business, you don't have a lot of traffic to begin with.

You may not have reached into a large body of affiliates, whereas if you use a network, obviously, there's 10s of 1000s of existing marketers, you know, from all their businesses, and some fraction of those may say, hey, the terms your program look pretty good.

I'll sign up for it and start sending you whatever kinds of traffic they have.

So at least in the beginning to build critical mass you might want to go with a network.

If you want total control, though, absolutely.

You can run it on your own site.

You just it's a lot of work.

Katie Robbert 14:58

What's interesting is you know I don't hear a lot of conversation around affiliate marketing in terms of general market marketing strategy.

And so I guess my question is, why is that? Is there a perception that affiliate marketing is a last resort or there's something not great about it? Like what is the general overall perception of doing affiliate marketing?

Christopher Penn 15:24

It's interesting, a few things.

One, it does have a reputation sometimes deservedly for people to send you garbage, right.

So they'll send you a lot of traffic but it's, it's it's worthless traffic, to it's his own profession.

It really is a sub genre of marketing that requires decent study, some effort to manage on the brand side, and to be an effective affiliate on the affiliate side.

There are plenty of folks out there who are amazingly strong affiliates, people who generate, you know, six or seven figures a month as, as super affiliates, who could just, you know, direct masses of traffic.

In this age of influencer marketing effectively, that's what affiliate marketing is, it's just you know, influencer marketing is just a shining your name for it.

And the pay tends to be better in favor of the influencers, then then in affiliate marketing.

But the other thing is kind of given affiliate marketing a bad name is cases where you have multiple levels.

With then you start talking about like multi level marketing, network marketing and stuff like that, sort of the, the, I guess, the Amway slash, you know, Mary Kay kind of thing, where, again, you have, in situations like that you have people who are more focused on building their affiliate network than they are actually repping your company's products and services.

And so dealing with those folks can be can be tricky, but more than anything, it really is just that it's a profession unto itself.

And if you don't know what you're doing, you like with all forms of advertising, you can lose a lot of money very quickly.

Katie Robbert 16:58

Gotcha.

It was just, you know, it's one of those things where I hear the term occasionally, but it's never something that I've ever sat down and really had a conversation with someone, someone about to say, why isn't it? Why don't I see, included more often in those strategic plans? And I was wondering if it was, you know, more, I don't know, the terms.

I guess, just the the less desirable version of marketing, I guess, is the best term I can come up with, um, you know, I sort of see it similar to the way people are starting to look at, you know, certain social network ads.

So if you have your ad on, you know, one of the big four, then, you know, it's not the best you could do.

That's kind of the way that I've always thought about affiliate marketing.

So I've never really explored it, but I feel like I honestly just don't know enough about it to really give it a fair judgement.

Yeah,

Christopher Penn 17:54

it is so unprofessional.

And I think one of the places that it has a lot of potential that people don't think about enough is in the realm of influencer marketing.

So it's funny.

For a lot of people who are up and coming, you know, influencer wannabes, some of them will even post like, you know, essentially unpaid stuff on behalf of brand to try and attract that brand's attention, and to look like they're a bigger deal than they actually are.

And conversely, there are a lot of, you know, brands that would be like, we'd like to do something with affiliate marketing, but we don't want to hand $100,000 to some person on Instagram, and hope it all works out, right.

And I think the technology and the infrastructure of affiliate marketing really lends itself to fill those gaps.

Like, for example, with the Trust Insights newsletter, The day we started it, we had affiliates in there, because we'd sign up for the programs as soon as we found the company.

So our first newsletters went out with known reputable vendors that are effectively sponsors and they show up as sponsors in the newsletter.

Now, are we getting paid at a media budget? Sponsorship? No.

But if you buy something from those companies through our newsletter, do we get paid? Yes.

And so that immediately lends a an air of credibility to the to a startup newsletter that it might not otherwise have.

When you read it, you go, huh? There's, you know, this company, oh, Agorapulse Social Media Marketing Software.

Oh, that's interesting.

So Trust Insights is already a partner with with Agorapulse.

That's kind of cool.

They must, they must know what they're doing.

Right? And then, on the company side, the risk of an end of new influences.

Okay, we've got Katie's got this great Instagram channel that features most of your dog.

Instead of saying I'm going to try Han you five grand and see what happens and say no, Katie, go sign up for our affiliate program.

And because we like you so much, we'll give you you know, a more preferential referral fee we'll give you 3% Step 2%.

And then I can see can Katie actually create newsletter signups or form fills or downloads or something? And if if you knock it out of the park, they're like, Okay, Let's take her Abby Phillip burger like Katie, now we're going to work a direct partnership because you can clearly put, you know, 1000s of dog fans into our CRM.

Or the flipside is, you have a million followers on Instagram and you generate like two signups a month, like, she may not be the real deal.

If she's got a million fans, and can't get more than two people to sign up for our newsletter.

We'll let her continue to say that she's she's a partner, but we'll keep paying her at the base affiliate rate and say, Yeah, let's, let's let's not deepen this partnership any further because she can't generate results.

Katie Robbert 20:33

So you can use it as a way to vet your influencers, for example.

Christopher Penn 20:40

Exactly right.

And I think that's a really, again, that's one of the things is overlooked about affiliate marketing is if you can vet your influencers, the person a may have a million followers, but generates two sales a month, person B may have 10,000 followers, but generates 100 sales a month, I'm gonna go with Person B, right? Because they can generate more of the kind of result that I want.

Katie Robbert 21:02

Got it, which makes sense.

So what what would be the next step for someone like Trust Insights, who was interested in dipping their toes into affiliate marketing? So you know, pretending that you know, we didn't already have those partnerships, you know, what would we do next?

Christopher Penn 21:20

Our first step would probably be to evaluate the different networks like Commission Junction, Rakuten, ShareASale, IDEV, affiliate, etc.

And investigate to see what other kinds of companies are on those networks, right.

So we might actually even sign up as an affiliate on all those networks first, and see what the competition looks like.

Are we up against the most like T shirt print shops, and you know, use CD collectible sales companies like this network may not have the right crowd? But if we sign into a network, it's like, okay, MailChimp is here Salesforce is here.

You know all these mahr tech companies, okay, okay, this is probably more a crowd.

So sign up, sign up as an affiliate look around, see who's in there.

And then sign up as a brand, once we found a network that seems to have honestly competing vendors, but certainly, companies are in our niche.

We sign up as a brand, and then let's get our links, you know, obviously take care of all the legal paperwork, and then start rolling out a program and say, Okay, well, what, what are we trying to achieve? What's our goal? Do we want newsletter signups? Do we want website traffic? Do we want lead form fills.

And then work with that, that platform technology to implement the program, putting up the tracking pixels after lead forms and all that stuff, and then start rolling out and see if if affiliates sign up for it.

At the same time, I would advertise, say in our newsletter and say, Hey, if you are if you run a marketing platform of some kind, when you've got an audience, maybe you've got 20,000, followers on Twitter, whatever, and you would like to promote Trust Insights and get paid for it.

Go to a share sale, for example, sign up as an affiliate and then find us in the share sale marketplace.

And you can, you'll get your links, and you can start sharing Trust Insights.

And it's all seamless and taken care of.

You don't have to negotiate with us anything, you just accept the terms of the program, share the Trust Insights, stuff in your newsletter and on your Twitter account and watch the checks roll in small checks.

Katie Robbert 23:18

Well, you know, again, depending on where you are in the business, those very small checks might be critical.

You know, and so we don't, you know, I know we have affiliate links in our newsletter, but aside from that, we don't push them really hard.

And so the minimal amount of revenue that we have coming in is fine, because we're basically getting back based on the effort we're putting into it, which is recopying, the links over and over and over again every week and not really promoting them.

So anything we get is kind of nice.

But if we were pushing it hard, then that would be a different story.

And so for some businesses, that is definitely an option as an additional revenue stream, to maybe get you over through a transition period or whatever it is that you need to do at that time.

Christopher Penn 24:07

Exactly right.

And if you're on the affiliate side, I will tell you this, the secret term to look for is recurring.

Right.

So there are some programs in the early days Netflix was one of them, where if you got somebody to sign up for the thing, you got to check as long as the people you referred stayed members so somebody every month that somebody stayed and Netflix member, you got a small amount of money for that person remaining a member so it was an incentive to not send junk traffic as incentive to send quality traffic because you could get a decent amount of money that way.

In fact, there were some programs I was on early in on that.

I still get a check.

You know, it's like $10 now cuz I again, I've not put effort into it about 10 years.

But 10 years later, still getting checks for a program I stopped marketing a long time ago.

It was really simple.

tastic so if you are thinking about affiliate marketing as a person wanting to be an influencer or whatever, the recurring revenue programs are definitely the ones to look for because they, they pay out less upfront, but in the long term, they can turn into some serious sustainable income.

Katie Robbert 25:18

That sounds like a really nice side hustle.

Christopher Penn 25:22

It is it is unfortunately, my side hustle is now my main office.

Katie Robbert 25:29

Well, I can't help you there.

Christopher Penn 25:35

If you've got comments or questions about affiliate marketing, I want to chat about it.

Pop on into our free slack group go to trust insights.ai/analytics.

For marketers, we use over 2000 other markers are asking and answering each other's questions all day long.

And wherever it is that you're watching or listening to this show.

If there's a platform you prefer down, we probably have it go over to trust insights.ai/ti podcast, we can find the show on many different places to watch and listen.

Thanks for tuning in.

We'll talk to you soon.

Take care


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