Affiliate Marketing Explained
The dream for most businesses is to earn a passive income, aka make money whilst you sleep. For most people, this is first done through affiliate marketing. Affiliate marketing is where someone’s product or service is promoted by another business or company (usually on a website) to receive a commission. A popular way of affiliate marketing is through YouTube’s partner program (having your ad in someone’s video). The idea behind it is if anyone makes a purchase through the link given (in the video or on the website) or someone uses the code then a commission is given to the affiliate, usually in the form of a percentage, and the company obviously gains traffic to the website.
There are 3 main parties to affiliate marketing; the product creator, the affiliate and the consumer. The product creator or company is a seller, this can be a big company such as Apple or a small company that you haven’t heard of. The affiliate or publisher can range from a single individual or to an entire company, the affiliate is who is advertising the product or service. The consumer is generally the audience of the affiliate, they buy products from the affiliate and are influenced to buy products/services made by the product creator or company.
So how exactly does it work?
So let’s assume we have an affiliate called Jake. Jake has a website that reviews technology of all kinds, Phones, Laptops, Headphones etc. He shares videos of him using technology and reviewing it along with pictures and owns a forum with an active fan base that interacts with each other. Jake has been affiliated with Apple for years, in every written review and video on his site mentions a link containing his unique code that brings people to Apple’s website.
An example of an affiliate link could be: apple.com/uk/shop/affiliateJAKE
The idea of an affiliate link is so Apple can easily identify which buyers have come from Jake’s website. Apple would pay Jake a commission every month which could either be based on how much is sold through his affiliate link or they could have an agreed price for at the end of every month. Another thing Apple could do is they could send Jake a newly released product and ask him to review it on his page. This is a really effective way of marketing for Apple as the people on Jake’s website are people that are likely to buy technology so will more than likely to go through Jake’s affiliate link and buy things from the Apple website. It’s a win-win situation for both the affiliate and the product creator, Jake (the affiliate) is effectively being paid for doing something he was doing already, and Apple (the product creator) is gaining traffic and income through Jake’s audience.
How can affiliate marketing work with YouTube?
Companies often give content creators (or the product creator) on YouTube a partnership. This is where they give them a discount code to plug at the start of their videos so subscribers can buy things on their website. The code can be used at check out to receive 5% off the website as an incentive to use the code. This usually happens when the content is similar to the products being sold, similar to the website or has a similar target audience. Companies also approach bigger YouTubers (sometimes with nothing in common to the product) as they have more subscribers so the sponsorship will reach a larger audience. The YouTuber will then receive a commission for whenever their particular code is used on the website notifying them that they came from one of their videos.
Another way of affiliate marketing on YouTube is when a company creates a short ad to give to a YouTuber to play at the start or end of their videos to promote their product. Again this is often when a YouTuber has a similar audience to the company. A company could also give a YouTuber a product to use in a video, to give that product exposure, for example, Razer (a technology company) could give a YouTuber a mouse or headset to test for a video and to review it whilst they play a game.