Is it worth running affiliate marketing programs?

Is it worth running affiliate marketing programs?



One can assert that affiliate marketing is profitable only for publishers because they may easily make heaps of money using it, while merchants have nothing but bear expenses for everything related to advertising, and to cap it all, affiliate marketing programs. 

Do you know that today, major companies all over the world invest millions from their budgets in running associate programs? Find it hard to believe, don't you? Then, let's turn to some data. 



Some stats


According to stats, more than 80% of brands rely on and run affiliate programs. 90% of merchants are strongly convinced that AM is essential for their marketing strategies. For instance, in the US total brands' spending on affiliate marketing is expected to hit $6.8 billion by the end of this year.


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What's the drift of all this? Are they dripping with money and willing to throw it away? It is not the case, we guess.

And we are here today to disclose the benefits of running affiliate programs for advertisers.



What is an affiliate program?


Generally speaking, it's a type of agreement whereby merchants pay the affiliates commission to send them traffic. In other words, you, as an advertiser, pay publishers for additional promotion of your products or services. Publishers, in turn, post affiliate links to your website on various web resources. The commission, you have to pay for such a promotion, doesn't come by chance. There are three main advertising models, and fee prices vary accordingly. 


  • CPC or cost per click: you pay any time a user clicks a link and comes to your site. It's best-suited to drive traffic to a website. Although the price of this ad model is usually very low (starts at $0.50), the volume of clicks can be rather high. 
  • CPA or cost per action: you pay for a certain action performed by a user, for example, purchasing, signing up, completing a form, creating an account, etc. You choose and determine this action yourself. It's the best option to increase sales. The average price of a CPA is rather high; it starts at $30.

  • CPM or cost per mile: you set a price and pay for one thousand views of your offer or clicks on your ad. Choose this model if your main goal is to increase brand awareness. Average CPM rates are usually $5-10.


However, a commission cost can vary enormously across industries, see the average prices below, for reference.


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But an inexperienced advertiser must be wondering what such a promotion can bring in, except for heavy expenses. A whole bunch of stuff! 



Advantages of affiliate programs for advertisers


Just imagine, affiliate programs generate 15-30% of all sales for advertisers! Let's take a closer look to see how it comes.

First and foremost, being a merchant and running an affiliate program, you don't risk losing your money. You don't leave your money on the table - you pay for a result, i.e., a conversion. Everything is under your control, from selecting an ad model and determining the price to verifying and identifying the desired result. And as a result, your product comes across potential customers.

Even if you were not present online before, associate programs might help you reach out to the market quickly and easily because affiliates play roles of sales representatives with bases of potential customers willing to purchase your product. And if you've already been present online, affiliate programs can assist in boosting traffic to your website, therefore, increase a chance of potential sales and create brand awareness. Eventually, you will get more buyers and effect more sales, gain more profit, and your small investment will pay off in spades.

Another small but meaningful advantage of an affiliate program is earning customer loyalty. According to psychologists' observations, customers are likely to heed third parties' advice. If there's someone out there praising your product, it means that the product must be worth something. Thus, you start building trust.


Do you still doubt that affiliate programs might yield profits? You have a right to! One should be confident of success before investing in any strategy. As the saying goes, think before you click. And here, you can carry out a simple analysis by monitoring your competitors' activities, searching for case studies, and client testimonials. The perfect example of a successful affiliate program is Amazon Associates. To make it clear, currently, 40% of Amazon's sales occur through third-party selection. If you start searching, you'll certainly find plenty of popular brands that are running affiliate programs, among them eBay, Shopify, Rakuten, and many more.



The most beneficial niches


So, we hope, there is no longer any doubt that carrying out affiliate programs is advantageous for many brands. However, for some businesses, these benefits are much easier to get than for others. And here much depends on the area or niche a merchant involved in. As practice shows, there are several niches in which advertisers can make the best out of affiliate programs with minimal effort.

And here's a list of them, that was compiled based on showings and data of well-known brands.

  • Clothes and accessories


It's one of the best niches in which merchants can benefit from AM. Successful affiliate programs of such brands as Amazon, ShareASale, Nordstrom will clearly demonstrate it. For instance, ShareASale alone has more than 1.5K associate programs.

  • Health


Although in this area, there are a lot of challenges associated with selling medicines, the niche is still popular among affiliates that are willing to promote your medical devices, supplements, or well-being services. Furthermore, the core audience is growing day by day, for more and more people start searching for solutions online. And in order to reach out to them, all you have to do is to start running an associate program. 

  • Beauty


It's an area in which affiliate marketing shows good results. Even though a targeted audience in this niche mostly consists of women, now more than ever, they tend to turn to various influencers, bloggers, YouTube channels for information and recommendations. Whether you sell cosmetics, makeup supplies, or any services related to the beauty sphere, you'll easily find plenty of affiliates that will boost your sales in a flash. Take a glance at Black Opal, Sephora, or Stowaway Cosmetics to fully realize how affiliates can broaden the audience and increase brand awareness.

  • Home and garden


Home renovation and garden design have become extremely trendy for the last years. Dying for taking somebody's breath away, people are looking for fresh ideas and innovative things on the Internet. And that's where you can milk it for all it's worth, following the example of Sears Parts Direct or DollarTree.

  • Computers and technologies


In the electronic realm, everything that is recommended by third parties has more credibility. That's why customers search for reviews or references before purchasing something, and affiliates would be glad to provide these recommendations, promoting your brand.

  • Food products


Cooking blogs and reviews are now more popular than ever because people compete with each other, demonstrating their culinary abilities. Most bloggers in the area are ready to promote your products, so take this opportunity and join such brands as Home Bistro or Godiva.

  • Sport


You'll surely benefit from affiliate programs in the niche. Check out SweatCoin, HealthyWage, or Fitbit to be sure.

  • Betting


The overall betting market is huge and well-developed today. Although traditional sports betting undergoes some difficulties and changes now (you can read more about that in our previous article), it doesn't halt the growth of this vertical. The betting audience is vast and the number of experienced affiliates in the area is enormous. Thus, if it is your niche, then you can make your presence felt on the fly. 1xBet and Betzest with their affiliate programs will serve as bright examples.

  • Dating


It's an evergreen vertical. Moreover, according to statistics, it's the niche with the highest amount of services and the highest amount of users. If you're involved in this niche, you're probably well aware of the strong competition in the field, that's why additional promotion by affiliates wouldn't go amiss. Just take a look at eHarmony or Elite Singles, for instance.

  • Business


Being involved in the B2B sector, you doubt that you can gain an advantage from affiliate programs, don't you? Let's have a look at stats, they speak louder than words and won't let us lie. According to the data, 90% of B2B buyers confirm that online content significantly influences their buying decision. It infers that with the help of affiliate programs, you can easily make an impact on the purchasing decisions of your customers.

  • Experience-focused areas


According to statistics, a young generation prefers experiences to objects. That's why items related to art, education, and traveling are in high demand today. So, if it's your niche, you will derive a lot of benefits from launching associate programs.

  • Games, books, and toys


The majority of customers (70%) check reviews and user comments rather than read professionally written content. In this niche, you could invite anyone you like to participate in your affiliate program, but you should be aware that unpaid reviews or comments may not increase your sales.

It's not a complete list of beneficial areas, for sure, but the most popular ones. You'll also derive a lot of benefits from running affiliate programs in such niches as family-related products or services, gifts, art, music, media, hobbies, etc.



Final thoughts


If your products or services fall into any area above, congrats, you're in luck! Don't wait, grow some balls - start running your own affiliate program to improve your business! All it takes is just to follow suit.

Even if you haven't found your niche in this list, it doesn't particularly mean that your business can't benefit from affiliate marketing at all. The areas mentioned above are the ones in which it's much easier to apply this strategy. Perhaps, being involved in another niche, you will need to make more efforts to get the desired profits from an affiliate program, but still, it will work.