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Affiliate Marketing Pros & Cons

July 25, 2022

affiliate marketing

Affiliate marketing is a performance-based business where a company pays third-party publishers a commission to generate leads or traffic to promote their product or service. This business model is one of the most effective ways to connect with a core audience and promote brand awareness.

The affiliate marketing industry is worth an estimated $8.2 billion in the USA. As a result, affiliate marketing is a popular way to make an income. But is it the best way to make money online in 2022? In this article, we unravel the pros and cons of affiliate marketing, if it's still worth it, and issues with the business model.

What Is Affiliate Marketing?

Affiliate marketing is a way to make money online without owning or creating products. So you don't need to deal with customer service or supply chain issues. Instead, you're like the middleman between a search and a purchase. Your goal is to drive traffic to offers that you promote either organically with things like a blog or podcast. Or by using paid advertising on platforms like Facebook and YouTube.

The three main types of affiliate marketing business options include:

  • Unattached-no relation to the product or service 

  • Related-connected to the promoted product or service

  • Involved-the affiliate has used or is using the advertised item

You don’t need any previous experience to become an affiliate marketer. But you're always on the hunt for a new audience, and you need to make sure that your offers match the needs of your target market. 

How Do You Become An Affiliate Marketer?

Start by choosing a profitable niche with some competition and growth potential. But narrow your scope, and don't pick a niche that's too broad. You want one with multiple products or services you can promote. Some niches get better sales, and you can make more money. So even if you're passionate about a topic, if there isn't a substantial selection of affiliate product opportunities, you won't make money.

Use tools like Google Trends or Keywords Everywhere to check out search volume. Look at social media platforms like Facebook and TikTok. What niches are popular? Where does your audience hang out? Spend their time or money Then evaluate market demand using spy software like Adplexity or SpyPush and access things like:

  • What's the competition like? 
  • Are people actively searching for this niche?

You can also use tools like ahrefs or Google Keywords Planner to find new and emerging keywords you can rank for on Google quickly. (16%-20% of Google searches are new every year). You want some competition to ensure that there's an audience. 

picture of digistore24 logo

Join an affiliate marketing program or network to find an affiliate product or service in your niche that you can sell or link to and make an affiliate commission. But you need to do your research and make sure you connect with reputable sites. A few of the more popular quality networks include:

Pro Tip:

You can also conduct a Google + search query + affiliate program or even contact businesses directly and ask them if they have an affiliate marketing program. (But make sure you pick the right offers-ones with a good commission in your niche). Then select your marketing platforms.

  • How are you going to drive traffic to your offers? 
  • Will you leverage paid or organic traffic? 

Organic traffic is free. But it takes time and consistent effort to rank your site or build a substantial following. You need to become a content creator, share high-quality and valuable content and build trust with your audience.

Paid advertising is a way to get quick wins, but it's expensive. (Facebook's CPM rose 89% in 2021). And it takes on-point copy or scroll-stopping creatives and money if you want to achieve high conversions.

What Are The Pros & Cons Of Affiliate Marketing?

Affiliate marketing is a popular digital marketing business model. It's built on a commission-based structure and is becoming a key component in engaging consumers to purchase products online. Affiliate marketing represents 16% of global ecommerce sales and is one of the easiest online business models to start. It's a low-cost investment with the potential for high-profit margins.

But because it's commission-based, you rely on a steady stream of traffic which is inconsistent and difficult to come by. You need to constantly find an audience interested in the products you're promoting. Affiliate marketing is also very competitive; more than 80% of brands have affiliate programs. So you need to have an irresistible offer, a unique angle, or fill a gap in the market. There are other pros and cons to affiliate marketing that you need to consider. Let's take a look:

Affiliate Marketing Pros:

1. Low Investment Costs

Low cost doesn't mean free. So you need to plan for a budget of $500-$3000 to start. This amount will cover the costs of things like:

  1. Hosting (like Interserver)
  2. Spy Tools (like Anstrex)
  3. Tracking Software (like Post Affiliate Pro)
  4. Landing Page Builder (like Instapage)
  5. Ad Budget

But there are ways to score a few quick wins that won't cost you big bucks. For example, you can publish a blog and find keyword opportunities that aren't too competitive. Look for ones with a low cost per click, and focus on long-tail keywords so you can make money faster. (For example, create low-competition blog posts on topics like 'best' or 'review hacking').

picture of anstrex logo

You can set up a YouTube or YouTube automation channel (like alux.com) and drive free traffic. Or leverage social media platforms like Facebook and TikTok and design creatives with virality potential.

But you need to build a substantial audience and deliver high-quality content. Or create videos that address a pain point or fulfill a desire in your target audience. You need to demonstrate how your offer(s) will solve a problem or enhance their lives. So you have to build trust, engage with your viewers, and provide value so they'll be compelled to click your affiliate link.

2. Market-Ready Audience

There are a plethora of untapped products and services you can promote in any number of markets. But it's about finding the best offers-ones that coincide with your niche and target audience. You can promote as many offers as you want as long as you comply with the affiliate platform. (ClickBank lets you have 500). 

You get paid a flat commission whenever you influence a sale on a website. But you need to have a good offer. One that weighs in with your audience and that they're likely to buy. And your audience needs to be aware or actively searching for what you're promoting (like weight loss, where you offer a keto-based solution or supplement to help people lose weight).

3. Flexible

You can work wherever you have an internet connection and choose offers from anywhere in the world. You just need to create unique and engaging content and leverage purchase power in a popular niche or trending market. But you need traffic and eyes on your offers. So you're either publishing dynamic organic content or paying cash to invest in paid ads. 

Affiliate marketing is a popular way to make money online and is cost-effective for business owners. But it's not a get-rich-quick scheme; it takes work and perseverance to succeed. And you're either paying for your promotions with your time or money. But you can sell as many products as you want, and there's no set schedule for when or where you work. There's also no limit to the platforms you leverage or how many networks you sign with (as long as you're in compliance).

4. High Income Potential

There's no cap on how much money you can make as an affiliate marketer, but affiliate marketing is a numbers game. So if you want to be successful with the business model, you have to understand the formula. (The more sales, the higher your commission rate):

  • Searches (visits)
  • Affiliate clicks (click rate)
  • Conversion rate (affiliate link clicks)
  • Number of sales=Commission rate

The goal is to drive traffic to your offers and get people to take action. But affiliate marketing's not about publishing as much random content as possible. Instead, you need a plan that includes effective marketing and advertising techniques.

So you need to develop strategies that monetize and optimize your platform and tap into buyer intent with methods that focus on creating targeted content and information people are actively looking for. (Customers on the precipice of taking action). 

affiliate marketing

You also want to look for high-ticket front affiliate offers that have a complementing backend offer in a profitable niche. (One that resonates with your target audience). Again, there's no limit to your income potential. But to achieve consistent traffic, you need to either leverage paid ads or publish valuable content on a consistent basis. 

Pro Tip: 

Pick residual commission offers that create passive income streams. This tactic will make you more money and help build your long-term security.

5. No Customer Service

Because you're not selling a product or service, you don't need to worry about customer service. Affiliate marketers just need to entice people to click the link to their offers. The rest is up to the brand or company you're promoting. But because you don't own an actual entity, there's no brand loyalty.

So you need to constantly generate interest for the products and services you're promoting. And you don't own the customer. They belong to the network. So you're always on the hunt for a new audience, and need to do the legwork to create a buzz around the product or service you're promoting. 

6. Scalable

You can scale quickly with affiliate marketing because you're not tied to a specific product or service. You can promote multiple offers and leverage platforms to drive traffic to your links. You can also include upsells for products you promote. 

Use spy tools like AdPeriscope or do a Google search for things like 'how do I earn' to see what competitors are promoting or what other people are ranking for. Use other marketing techniques like email or SMS marketing, or scale using methods like:

  • Create organic content on multiple channels (blog & YouTube channel)
  • Run paid ads with more than one profile or have various ad campaigns (Facebook)

You can also increase the number of affiliate links you promote. But don't add too many links to the same body of content, or you risk losing the trust of your viewers. 

7. A Thriving Industry

Affiliate marketing is one of the best ways for a brand to reach its target audiences faster or discover new audiences for its products and services. It's also one of the most effective ways for a business to monetize its products and services or generate leads.

Affiliate marketing is the driving force behind global sales and is an ecommerce powerhouse. (It's worth 16% of USA ecommerce orders). And affiliate programs that want to get the word out in a lucrative niche will pay better commissions.

In fact, 83% of marketers use affiliate marketing to increase brand awareness. As a result, the industry will continue to grow, creating more opportunities for affiliate marketers in the future.

Affiliate Marketing Cons:

1. You’re Building Someone Else’s Brand

As an affiliate marketer, you're growing another business's brand. You don't own a product or service and have no customer loyalty. Instead, you're doing the hard work to find new and innovative ways to deliver content and drive traffic to affiliate links. But once that consumer clicks on the link, they belong to the business.

So you've spent all that time, effort (and maybe money) for a commission of 1%-50%. You also rely entirely on the affiliate program for your income. You have zero control over any changes to policy, product, or payment. As an online marketing coordinator, you're doing all the heavy lifting but don't have anything tangible to show for your efforts.

2. Traffic Is Unpredictable

Traffic is your lifeline. As an affiliate marketer getting purchase-ready traffic is the crux of your business. You need to master traffic, so you have to do research and understand your readers.

You can't control how well your content ranks or if your affiliate marketing campaign will be successful. And you can't manage platforms that you leverage for your paid ads. But you can become an expert marketer with an advertising strategy to drive traffic to your offers. Consider:

  • What platform will you use?
  • Organic or free traffic?

A few of the more popular options for generating traffic include:

  • YouTube

  • Blog

  • Facebook Groups

Pro Tip: 

Find the best product offers for your niche. But remember that when there are a lot of affiliate marketers promoting the same products and services, the market becomes saturated. So it takes more time or money to get a sale.

3. No Control Over Affiliate Programs

Unfortunately, not every partner is a good partner. And there are bad affiliate partnerships that might not pay you. Or ones who have 'fine print' in their contracts. In addition, not all companies are ethical or stand behind the product or services they sell. So you need to research networks carefully to ensure they're legit. (And even then, you're still not involved in the decision-making).

As an affiliate, you have no control over pricing and commissions. You can't negotiate your rates, and your sales need to be verified for you to qualify for commission. The other issue is that the product can be discontinued. Or the network can change leadership. (Which is also out of your control but can directly impact your income potential).

image of growing web traffic

4. Competitive

Affiliate marketing is a low-barrier entry business model. You don't need a lot of skills or upfront capital, resulting in a pretty crowded online space. But this isn't a killer. You just need to niche down. You also need to recognize that new competitors are entering the game every day, and everyone is vying for the number one spot and audience.

In fact, most affiliates fail. So if you don't want to fail, you need to make really good things happen. You need to become a producer. Put out valuable content, do more, and be better than the competition. You need to create content with value and a stellar angle to stand out to drive organic traffic. Or you need to be willing to shell out big bucks to pay for ads. And the more popular the product, the more you'll need to spend to get clicks that convert to sales. 

5. Time Or Money

It will take you at least 3-6 months before you start generating income. And you need dedication and discipline to earn consistent affiliate commissions. Affiliate marketing is a long-term business strategy that takes time to establish. You need to: 

How To Become Established:

  • Build an audience

  • Rank your affiliate website in the SERPs 

  • Establish a following on social media platforms 

  • Spend money on paid ads

  • Find high-converting offers for products that fit your niche

Either way, you need to do a ton of upfront work to see results. Affiliate marketing is not a passive business model. It's an active business you need to work on consistently to stay ahead of the curve. You're a tiny fish in a huge pond. So if you want to succeed, you need to treat this like a real business and be prepared to do the work.

6. Fraudsters & Hijackers

There are a lot of lies in the affiliate marketing space—course creators touting their success on YouTube. But you can't copy and paste course creators' stuff and think you'll get sales. Most of these so-called gurus aren't telling you the whole story. Like how long it took them to achieve that level of sales. Or the countless hours of work they did behind the scenes. It's also really easy to fake screenshots, and most of them only show short-term gains.

Questions For The 'Gurus'

  • Are they able to sustain that level of income long-term? 

  • Do they still do affiliate marketing? 

  • Do they only make money by selling their course?

A few YouTube masters in the space share some valuable and honest information. But even the best affiliate marketing courses won't be enough to generate consistent traffic if you don't publish quality content. Or be willing to pay the bucks for advertising.

The reality is you'll need more than a course to get clicks. And you need a lot more clicks than you think before you make any real money with this business model. The other issue is hackers—unscrupulous affiliates or people who have figured out how to insert their codes into your links. 

Pro Tip: 

Never embed a direct affiliate network link onto your website or platform. Instead, use a link cloaking tool like Pretty Links for your affiliate business.  Software that makes it harder for them to hack and easier for you to track.

Is It Worth It To Do Affiliate Marketing?

Yes, it's worth it to do affiliate marketing in 2022 because there are always new products and services. In addition, the global social media reach is 4.62 billion(10.1% YoY from 2021-2022), and 76% of consumers have purchased a product they saw on social media.

Let's compare Amazon FBA vs. affiliate marketing. You don't need to wear as many hats as an affiliate marketer (like worrying about supply chain issues or having to store inventory). But despite the simplicity of the business model, only 5% of affiliates are successful. So why do 95% of affiliate marketers fail?

Most people don't succeed because they choose the wrong niche. Or they lack a content strategy and neglect the importance of video marketing. Others don't treat it like a legit business and focus more on the money than on providing value. 

affiliate marketing

To succeed with affiliate marketing, you need to build trust with your audience and be the best marketer-one that gives value to your viewers.

  • Why should people click your link? 
  • How does your offer enhance their life?

You need to understand customer psychology and how to leverage impulse or emotional purchases. Take the time to learn about your audience and access things like:

  • What platforms does your target market like to congregate?
  • Where are they spending the most time online?

Then access the competition:

  • Where are they making money? 
  • How can you execute a better offer or fill a void in the market?

To be successful with affiliate marketing, you need a marketing strategy that will get your audience to sit up and take notice. It takes an irresistible offer and on-point content or scroll-stopping creatives. You need copy that hooks your audience and makes them buy what you're promoting.

Become a trusted authority and shift your focus to providing value. And pick products you can get behind offered by reputable networks. Affiliate marketing isn't a get-rich-quick scheme. But if you're willing to hustle and do the hard work, it can be worth it in 2022

Issues With Affiliate Marketing 

The biggest issue with affiliate marketing is your lack of control. You're at the mercy of affiliate networks that can change the offer, alter the commission structure, or stop selling the product you're promoting. Sales need to be verified, so even if a person clicks your link, you might not make a commission.

The other issue is traffic. You need to constantly generate new and purchase-ready audiences with your organic content or paid ads. So you either spend time or money. And with a business model becoming increasingly competitive, generating a steady income stream (let alone a passive one) is often an uphill climb. 

cartoon of two men shaking hands after a business deal

The other problem is the business partnership between a brand and a publisher or blogger. Affiliate networks and their managers have revenue goals tied directly to affiliate marketing. So offer's aren't always based on the best product or solution for your target market. But more on who's willing to pay the most or who can make the best offer. This issue can result in clickbait tactics to drive sales that might not gel with your moral compass.

Conclusion

Affiliate marketing is a low-cost way to make money online. But you need to be willing to invest the time to build a trusted audience or do the work to create a following on social media. Then you can leverage organic methods to drive traffic to your affiliate offers. Your other option is to pay for paid advertising on platforms like Facebook, TikTok, or Instagram. 

Affiliate marketing takes consistent work and might not be the best online business. Your affiliate income isn't guaranteed-especially in the long term. You need to constantly find new and high-converting offers that invoke purchases from your target audience. But if you can develop an affiliate marketing strategy and leverage free or paid traffic and drive customers to your links, you can be successful with affiliate marketing. 

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