More sales thanks to affiliate marketing
In e-commerce, too, it is not just the price or the range of products in the range that is decisive, but an essential factor for success in e-commerce is the marketing activity initiated by the respective company and the processing of the market.
For many online shops, affiliate marketing is market cultivation, which usually involves a lot of effort and the promised success is only moderate. However, when used correctly and with a coherent strategy, affiliate marketing is an important source of revenue for online shops.
In this blog post, we want to show you what is important in affiliate marketing against the background of e-commerce. Here we go!
Affiliate marketing: what is it?
Again, this is an Anglicism with which only very few can do anything, but affiliate marketing has no other meaning than the establishment of a partnership network. In this network, the shop operator takes on the role of the merchant.
This provides the so-called affiliates with advertising materials with which they can promote sales. The merchant pays a commission to the affiliate for every sale initiated by the affiliate.
Since building and measuring such a network is complex, one can fall back on affiliate networks that support the shop operator in measuring sales. In addition, the network pre-selects relevant affiliates who can run the shop and who could make a meaningful partner.
The affiliate network also receives a share of the commissions generated. This means that the use of the network is also linked to the amount sold.
With the establishment of affiliate marketing, you increase the absolute reach by using multipliers and transporting your own branding via the banners provided. Here, too, the quality of the ads is higher than the quantity, because more appealing ads also increase the likelihood of strong affiliates applying.
Due to CPO (Cost per Order) billing, affiliate marketing is a very low-risk marketing tool for shop operators since large investments are usually not necessary to win over the first advertisers.
The commission model: affiliate marketing
Affiliates usually choose the partner with whom they can earn the most and/or whose promotional materials are of the highest quality. Within the framework of affiliate marketing, there are various remuneration models relevant to e-commerce:
CPO (Cost Per Order)
With CPO compensation, the affiliate receives a set commission for each sale. This is set in advance in the affiliate network. At this point, it is advisable to stagger the commissions based on the advertised quantity so that the affiliates have the incentive to prioritise the online shop. This means that affiliate marketing is absolutely calculable, and costs are only incurred if sales are generated.
PPL (Pay Per Lead)
The second compensation method is not as popular as the CPO commission model. Here, there is a fee if there is customer contact between the online shop and the customer advertised by the affiliate. Such contact is measured, for example, in a subscription to the newsletter, which is another possibility for newsletter marketing to generate additional recipients. In the B2B area, you can also measure customer inquiries via the contact form and pay them to the affiliate partner. Depending on the online marketing strategy, the PPL remuneration system is a sensible alternative to CPO remuneration.
In addition to the commission models mentioned, there is also a fee based on the number of clicks on the advertising banner. But here the risk lies entirely with the shop operator, and it is important to evaluate the requesting affiliates precisely so that the smallest possible spread enables a better CPO.
What is important in affiliate marketing?
In affiliate marketing, there are two essential factors for the success of the campaign: On the one hand, the amount of the commission is decisive for affiliate acquisition, and on the other hand, the quality of the ads and advertising materials determines the success of the overall campaign.
But your own shop is also an important factor for affiliates. Because the probability of conversion is very high, it is also very interesting for the affiliate to advertise the online shop since they know that a large part of their traffic in the online shop converts, which means sales for the affiliate itself.
Choosing the right affiliates and maintaining contacts within the network are also crucial for success. Promotions and relay commissions set the right incentive and arouse the ambition of the affiliates. At this point, it is important to be creative and follow the right impulses.
In any case, the top priority should be the desired quality, so that affiliate marketing grows constantly and healthily. Then nothing stands in the way of the new advertising channel!