The Top Pros and Cons of Affiliate Marketing For Businesses

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Over the last few years, the affiliate marketing industry has rapidly taken over. Now worth billions of dollars and predicted to grow exponentially in the next couple of years, it’s a tactic that many businesses use – both small and large to drive sales and generate online revenue. But for those that don’t understand it, the prospect of introducing affiliate marketing might be very daunting or might not enter your mind at all.

 

Firstly, before getting to the pros and cons of it, let’s discuss exactly what affiliate marketing is. 

 

To put it simply, affiliate marketing is the process in which an affiliate will earn a commission for advertising other companies’ products or services. After promoting a product/service that they are interested in, they will typically receive a part of the profit that’s generated by the sale of it. 

 

If you’re a business that’s working with an affiliate, it’s advisable that you track the success of the advertisement from the start. No matter if it’s a dedicated post or a backlink to your products or services, you want to determine how effective it has been. 

 

Of course, this will inevitably be uncovered by the number of sales that it produces, but you also want to track it to see which methods are working and which aren’t – so that you know how to advise affiliates in the future. Similarly to using a demand side platform when it comes to targeted ads, it can be a long-term strategy that helps to boost your brand awareness. 

 

Now, let’s get onto the pros of utilizing affiliate marketing:

There are numerous benefits that businesses can take advantage of when it comes to affiliate marketing, including:

It Increases Website Traffic

Even if a customer doesn’t follow through with the lead, affiliate marketing can still be very effective. Attracting more visitors to your site through a mention on their blog or a social media post, it increases brand awareness in the long term. This is especially effective if the affiliate has a large following and promotes your business in a very positive light.

It’s Cheap and Performance Based

Another huge benefit that comes with affiliate marketing is the fact that it’s a cheap advertising option. As affiliates are usually influencers or bloggers, the fees that they charge will undoubtedly be lower than that of celebrities who would promote your business through advertisements – for example, a television or radio one.

 

Secondly, it typically is performance-based. This means that your affiliates will only obviously receive their commission, once a sale is made. This takes the pressure off of you and makes it easy to monitor from the get-go.

A Better ROI (Return on Investment) 

Many marketing techniques are costly and don’t offer a great return on investment. However, when it comes to affiliate marketing, it’s arguably very beneficial when it comes to ROI. 

Due to the way that it’s structured (i.e as aforementioned, you’re not paying affiliates until a customer makes a purchase), there is little risk in terms of success.

It Can Improve Your Business’ Reputation

Every business wants to have the best reputation possible. And because of this, they will invest in techniques that increase their credibility with customers. This is where affiliate marketing comes in. It’s no secret that customers rely on and care about what others say about a business – this is something that’s been around since the very first product was introduced. And if there’s poor publicity about it, they will seek alternative business – most likely through your competitors.

 

With affiliate marketing, you can ensure that you’re getting positive publicity, which leads to more sales in the long term. As you’re paying them a commission, they will try their best to include good and useful feedback about what you have to offer. Just make sure to guide them as to how to include a backlink and to not make the article too unrealistic or false.

Now, onto the cons:

Unfortunately, with all forms of marketing, there are some downsides that you’ll want to consider before investing in affiliate marketing. These include:

Low-Quality Content 

Unfortunately, not every affiliate that you opt to work with will create quality content surrounding your business’ link. If they aren’t aware of the best SEO practices or are poor at writing, potential customers simply won’t be interested or won’t even see your link in the first place. For example, they might just spam backlinks throughout the content, or insert them into text in a way that doesn’t make sense/is obviously trying to sell a product or service.

 

Similarly, if they have a bad reputation or don’t seem credible, then many customers won’t listen to what they have to say and won’t bother clicking on the backlink. This is why it’s so important to scout out affiliates and ensure that they align with your brand before opting them into your affiliate program. 

Misleading Affiliates 

Following on from the above, unfortunately, some affiliates will engage in false advertising and mislead readers simply because they want to get commission. 

 

Although some businesses might not mind this as they simply want to generate more sales, others will only want their business to be promoted in an accurate way. Starting the relationship that you have with customers off in the right way, it will ensure that they aren’t misled and you don’t receive complaints.

Leads Aren’t Always Successful 

Ok, so above this article states that it doesn’t always matter if an affiliate link is successful as it only costs a business once a customer makes a sale. However, in order to generate more sales in the long term, affiliate links NEED to be effective – this is particularly important for small businesses or startups that must attain a certain amount of profit in order to keep operating and thrive within the industry. 

Otherwise, not only has the affiliate wasted time writing the article/promoting the business, but you’ve missed out on potential sales.