What Is Affiliate Marketing? Pros, Cons, and How to Get Started

Affiliate Marketing gives many people the chance to earn extra commissions by selling products or services provided by other companies or businesses. But if you’re still wondering what Affiliate Marketing is, what its pros and cons are, and how to get started, let The7, a Marketing Services Company, walk you through it!

What Is Affiliate Marketing?

Affiliate Marketing (also known in Vietnamese as “Tiếp thị liên kết”) is a form of Marketing that helps businesses introduce their products and services to customers. It is a type of Marketing that many Marketers use to earn money online.

As this business model gradually develops in Vietnam, we are also growing used to online shopping. That is why Affiliate Marketing was quickly adopted in the e-commerce market, on e-commerce platforms such as Shopee, Lazada, Zalora… Although it is still relatively new, Affiliate Marketing will become the most effective way to make money online in the future compared with other online income methods.

>>> See more: Holistic Marketing explained: benefits and how to implement it

Is Affiliate Marketing a Scam?

What does an Affiliate Marketing job involve? Is it a scam? Many people who take their first steps into earning money through Affiliate Marketing often wonder about this, simply because they think referring customers is multi-level marketing and a scam. However, if you read carefully about what Affiliate Marketing is, you will understand that this way of making money is not a scam at all. Here is why:

With Affiliate Marketing, you simply promote a partner’s products to customers, and you earn a commission when someone visits the product link, makes a purchase, or follows the seller’s instructions. Of course, whether customers click the affiliate link and whether they buy depends on their own decisions.

In reality, many organizations and individuals have used the name of Affiliate Marketing to run scams, leaving many people worried. But if you do your research carefully, you won’t need to worry when choosing Affiliate Marketing as a way to make money.

The Components of Affiliate Marketing

What does it take to do Affiliate Marketing? Before getting to that, it helps to understand the components that make up Affiliate Marketing. The breakdown The7 provides below will make your path to earning money easier. Specifically:

Merchant (Advertiser)

These are individuals or companies/businesses that can supply products or services in any industry, such as consumer goods, food, electronics, education, beauty, and finance… Merchants must meet all requirements on product sourcing and quality set by the publisher’s policies.

From the merchant’s perspective, Affiliate Marketing works like a distribution channel, but a fairly simple one with workflows that are rarely complicated. All it takes is designing a banner with all the relevant product information to easily promote your company’s or business’s products or services. Of course, commissions are only shared with publishers once a sale is made.

Publisher (Affiliate)

– Individuals or organizations that own websites with large, steady traffic

– Individuals or organizations that can run advertising campaigns and achieve a high rate of converting CPM/CPC traffic into CPA.

– Individuals or organizations that use MMO (make money online) methods and want to earn more profit from Affiliate Marketing.

Publishers know their audience and the visitors to their websites better than anyone, and they know when traffic is highest. Taking advantage of this, publishers log in to the merchant’s platform to pull in products or services that fit the audience already on their own website. When a customer visits the publisher’s website, clicks through, and makes a purchase, the publisher receives a percentage commission.

If you are reading information on a website one day and see banner ads from Tiki or Lazada… it is very likely Affiliate Marketing. In that case, Tiki or Lazada… is the merchant, and the website you are visiting is the publisher.

Customer (End User)

Customers are the people who use the merchant’s products or services or take other actions the merchant requests.

Affiliate Network

An intermediary platform that connects publishers with merchants. It also helps publishers easily track and evaluate the performance of advertising/sales campaigns. An affiliate network also provides the technical platform, including advertising links, banners… and pays publishers their percentage commissions.

Affiliate Program

The affiliate system set up by the merchant itself, which it can manage directly or outsource to a third party that specializes in software for managing and reporting on affiliate marketing activities.

Pricing Models in Affiliate Marketing

Besides the question of what Affiliate Marketing is, the pricing models in Affiliate Marketing also interest quite a few people. They include:

– Cost Per Action (CPA): CPA is an optimized advertising cost model based on user behavior. The merchant only pays when a customer takes a meaningful action such as making a purchase, filling in information, or signing up for a service…

– Cost Per Sale (CPS): The publisher only receives a percentage commission when the order is recorded by the merchant.

– Cost Per Lead (CPL): The publisher receives a commission when a customer completes the required registration form and the merchant agrees to pay for receiving the potential customer’s information.

– Cost Per Order (CPO): The publisher receives a commission when a customer successfully orders a product or service on the merchant’s website.

– Cost Per Qualified Lead (CPQL): The publisher receives a percentage commission when a customer completes the registration steps and the merchant agrees to pay for customer information that meets the requirements they have set.

Website Models With the Highest Conversions

Below are the website models that deliver the highest conversions in Affiliate Marketing, according to Accesstrade:

– Coupon site: Coupon websites usually attract a large number of users and have good conversion rates, because customers tend to care about price first and product or service quality second. Consumers have a habit that is hard to break: they always look for discount codes before buying.

– Review site: Product review websites often give consumers plenty of useful advice and nudge them to buy in the most effective way. That’s because customers naturally look up plenty of information about a product or service before deciding whether or not to buy.

– Comparison site: Like the coupon sites The7 mentioned above, comparison sites usually have very high conversion rates. However, they are often difficult to execute: in the Vietnamese market, only two providers have run this model effectively, websosanh and sosanhgia.

– Focus Industry site: A website that specializes in one particular industry. When the site becomes well known in the industry and receives more traffic, users trust it more and turn to it for opinions before buying products or services.

– Data Segment & Automation, Funnel: Websites that use Automation and funnels to attract the attention of large numbers of users.

– Cashback: This model is very hot in Vietnam right now because it taps into consumers’ shared psychology: they love rewards and “love small change.” As a result, Cashback websites usually have extremely high conversion rates and very large numbers of loyal customers. In the near future, this model is expected to be adopted by many companies/businesses in Vietnam.

Pros and Cons of Joining Affiliate Marketing

Although making money through Affiliate Marketing has become a trend many people choose, there is no denying the pros and cons that come with it.

Pros

– Low startup costs: When you join Affiliate Marketing, you don’t have to pay any fees. On top of that, merchants handle the products or services, so you don’t have to worry about sourcing or inventory.

– Easy to get started: There are almost no barriers to joining Affiliate Marketing. All you have to do is fill in your details on a form, and you can promote products or services at any time.

– No need to worry about shipping or return policies: Your job is to promote the brand, product, or service, while shipping and returns are handled by the merchant.

– No need to create products or services: In Affiliate Marketing, your task is to deliver products to clients and customers, while creating the products or services is taken care of by the merchant on your behalf.

– No special requirements: You only need to promote products or services well. You don’t need to take any courses or hold a license.

– Earn money at any time: You can earn money through Affiliate Marketing regardless of the time of day.

Cons

– Building referrals takes a lot of time: To earn money from Affiliate Marketing, you need to spend a lot of time generating referrals.

– Internet marketing skills are required: No one is formally trained in Affiliate Marketing, so to succeed you need to be able to market through the Internet.

– Advertising restrictions: Some Affiliate Marketing programs restrict advertising. For example, you may not be able to promote products or services by email or through PPC ads using certain keywords.

– Some costs must be paid: Affiliate Marketing programs only pay you out once your earnings reach a certain threshold.

How to Do Affiliate Marketing Effectively as a Beginner

Where should you start? If you plan to make money through Affiliate Marketing and want to get solid results, take a look at the following beginner’s guide to Affiliate Marketing:

Choose the Right Niche

Before you start building your first website, aim precisely at a Niche. If you haven’t chosen a target market yet, The7 has a few useful tips for you:

• Which topics are you passionate about?

The easiest work is the work you love. Even better, when you are passionate about something, you will know more about that field, which will certainly bring practical benefits to your Marketing and sales.

For example, if you are passionate about travel, the Niche you choose could be a travel-related field. However, you should also consider how profit can be generated from that Niche, and you don’t necessarily need to know the chosen Niche in great depth. If it has the potential to make you money, you can spend more time learning about it later.

• Which topic would let you write 25, 50, or even 100 blog posts?

The topic you choose to develop needs enough depth for you to build plenty of content around it. This is extremely important for building a credible website and for user-focused search engine optimization. If you don’t provide enough content on a topic, your website will be seen as not credible and won’t be able to persuade users to buy your products or services.

• Is there enough room in the field you choose?

Some Niches are very popular and entirely capable of generating profit in Affiliate Marketing, such as weight loss. So before choosing a popular Niche like that, make sure there is still enough room for you to “squeeze in.” Ask yourself whether you can make money and compete with the many other Affiliate Marketers in this Niche. If the answer is NO, keep looking.

• Do users really care about, or need, the products in your Niche?

Your Niche may attract plenty of user interest, and people may start searching for information, but are they willing to buy related products or services? If not, your Niche won’t make the money you expect.

• Is there an Affiliate Program in the Niche?

This is clearly a fairly important factor to examine closely. You can come up with a Niche idea that you know deeply on your own, but does that field appear in any Affiliate Program? If not, you won’t be able to make sales.

Research and Join Affiliate Programs

Once you have decided on a Niche, the next step is to research Affiliate Programs and the products or services to promote. Choosing an Affiliate Program often takes a lot of time, but don’t hesitate to invest it, because your revenue will come from here.

Take Amazon as a specific example: it is an e-commerce site that sells everything, so your Niche will likely include products sold on Amazon. It is also an extremely good place to do Affiliate Marketing because the commissions there are very attractive.

As of now, Affiliate Marketing in Vietnam offers notable Affiliate Programs such as:

– Masoffer: A reputable Affiliate Marketing platform in Vietnam with commissions of up to 20%. Payments are made quickly, and it supports publishers with many modern tools such as an automated revenue reporting system and automated advertising features…

– Accesstrade: Also known as a reputable Affiliate Marketing platform in Vietnam, with outstanding advantages such as diverse campaigns, high commission shares, seamless conversion capabilities, and trusted Japanese technology…

– Lazada: The Lazada Affiliate program helps partners make money from their websites, with a commission of 8% paid on each order. The program’s strengths are its advanced technology with attractive banners and images, along with an easy and fast payment cycle (Lazada has currently discontinued its Affiliate programs).

– Zalora: You can sign up for Zalora through the Commission Junction system or Zalora.vn. Zalora will then review your application to decide on a partnership. The commission is 12% for new customers and 5% for returning customers…

Most reputable companies that offer Affiliate Programs let you become a publisher for free. However, you will be asked to provide bank account or PayPal details, not so the company can take your money, but so it can pay you a percentage commission when you bring in customers.

Build a Website

After you’ve done your research, it’s time to get to work. If you are new to building websites or don’t know much about the web, use WordPress. The WordPress CMS is generally very easy to use and requires almost no knowledge of website setup.

You only need to follow these simple steps to set up your website:

• Buy a domain name: A domain name is your website’s address. The Internet offers millions of domain names, so take your time and choose the one that suits you best.
• Buy and set up hosting: If the domain name is your website’s address, hosting is the place that stores your site so it can run. Hosting is usually reasonably priced, so choose a reputable, high-quality provider.
• Set up WordPress: Once you have everything you need, install a content management system (CMS) for your website. Most reputable hosting providers offer pre-configured options for WordPress. With a few clicks and a few minutes of setup, WordPress is installed on your website.
• Install a theme: A WordPress theme provides all the colors and style of your website’s front end. With thousands of themes available, choosing one at the start is often quite difficult. Our advice is to start with a simple theme that you can easily customize later.
• Publish content: Once your website is done, start building content for it. But note that the content you create must fit your Niche and be engaging enough to bring users back. You should also make sure your website content is optimized for search engines.

Produce High-Quality Content

Once your website is successfully set up, you can join an Affiliate Program and start producing content. Your main goal is to build a credible website in a field you love, and to do that, create unique content. Here are a few types of engaging content you can consider.

Product Review: Your Affiliate Marketing website can be built around articles reviewing different products or services. This model is very popular right now, and if it’s done well, it can bring in high revenue. Fields you can choose to develop include movie reviews, travel destination reviews, restaurant and hotel reviews, food reviews…

Content that solves problems/questions related to your target market: When building blog content, research the keywords people are interested in and searching for. You should also research your competitors on forums or other media so you can narrow down your blog topics more easily.

Evergreen content: You can also build a website with Evergreen content (content that never goes out of date and is always useful to your target audience). More important, though, is to research expanded keywords before building Evergreen content, because your website will very likely benefit from using those expanded keywords in its content.

For example, if the content on the website you want to build is about wedding planning, all the content on the site will relate to that topic. To make things easy for everyone, the website should be divided into categories so users can find what they need. Of course, the purpose of this is to benefit your SEO activities later on.

Information-gathering banners: Showing pop-up banners that ask users to leave their information in exchange for an instant course or free news is considered a popular tactic that many Affiliate Marketers prioritize. Users typically provide their email address so they can receive a product from you. You can then use this information to sell products or services to them through Email Marketing.

Build an Audience

Having engaged users not only gives your website high traffic but also brings in significant revenue. But achieving that is not easy, so here are some ideas for you.

• Promote your content through social media

The most common way to start attracting visitors to a website is social media. Depending on your Niche and industry, choose Facebook, Zalo, Instagram… or other suitable platforms.

Keeping up engagement and user interest on social media is a great opportunity to make it easier to build a relationship between consumers and your company/business. Once you have earned your customers’ trust, start advertising campaigns for your products or services.

• Publish guest posts on blogs to get high traffic

Your website is still fairly new, so you need to tap into the audiences of others. Keep focusing on building your own content, but also pay attention to the content of larger blogs that have high traffic and, most importantly, fit your Niche.

By writing content for a larger website, you can reach many more potential customers and show them your in-depth knowledge of a topic. This helps increase traffic to your website.

• Build an email list

Building an email list is extremely important for Affiliate Marketing. You can start building your list around potential customers, or encourage them to register an account so they can get the latest updates from your website. Then you can push your quality content to these audiences by email.

• Apply basic SEO techniques to increase traffic

Search engines are still considered an important source of traffic for any website. When you build content for your website, don’t forget to follow basic SEO principles.

• Invest in paid advertising campaigns

Many Affiliate Marketers have invested in paid advertising campaigns to drive more traffic to their websites and increase sales. Many professional “Marketing folks” consider paid advertising a suitable way to get started, and you can use banners to advertise on smaller websites.

Promote Affiliate Offers

You can promote your offers in many different ways. Of course, it will depend largely on the type of website you build and the products or services you are selling. The7 suggests some good ideas, including:

• Honest product reviews

Take care to write the most honest reviews of products or services. The goal is to build trust with your customers, and always remember that they will often rely on your opinion. One thing to note, though: don’t focus only on the good sides of a product/service without mentioning its existing flaws. Honest opinions always get high ratings, and sharp images will catch customers’ attention even more.

After that, your product/service reviews can link to the website where your customers can buy the product/service if they are truly interested.

• Place advertising banners

You can also place advertising banners on your own website to promote Affiliate Marketing offers. The right banner placement can help you sell better, so keep that in mind.

• Link within your content

This is a very common way to promote offers. For example, you often see blog posts that link to certain products/services, and if readers click through to buy, the blog owner earns a significant commission.

• Send promotional content by email

Once you have an email list, you can use it to promote your Affiliate offers through promotional programs by sending emails. Just make sure you have already built a relationship with your customers beforehand. Most importantly, the emails you send must contain Affiliate links to the products/services you are selling.

• Discounts and gifts

Affiliate Programs often “launch” many promotions with discounted prices or attractive gifts to attract your target audience. For example, if you use Amazon as your Affiliate Program during the holiday season, your chance to advertise is coupons or gifts for customers who visit your website.

Note that when promoting Affiliate offers, you need to understand the terms and conditions of your Affiliate Program, because some programs have strict rules on how you are allowed to promote their products.

We hope the information The7 has shared above helps you understand what Affiliate Marketing is and how to do Affiliate Marketing effectively so you can earn significant profits. We believe this will be an important reference before you “take the plunge” into making money online.

For all information about our full-service marketing offering, connect with us today via Hotline: 082 246 7979 – 028 3899 7377 or visit https://the7digital.com/ for a consultation!

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