What is Affiliate Marketing and How to Make Money With it in 2018

There are many bloggers out there making thousands of dollars online. When you ask them how a lot of them talk about affiliate marketing.

The term pops up many times when you find different ways to make money online. It’s because, with affiliate marketing, many people are living the life of their dreams.

The true laptop lifestyle without having to worry about anything else.

Do you also want to become one of such people who make a ton of money from affiliate marketing?

Take a look at this:

This is Pat Flynn’s November 2017 income. More than 50% of this income was generated from affiliate marketing.

and here is the income breakdown from EOFire.com.

Entrepreneurs On Fire

If you want to see similar numbers in your bank account at the end of each month, this article is for you.

In this article, you’ll learn in detail what affiliate marketing is and how you can become an affiliate marketer and make money.

What Is Affiliate Marketing?

So what is this affiliate marketing?

The most simple definition of affiliate marketing is:

Affiliate marketing is when you promote a product you like and promote it. For every sale generated, you earn some commission.

Sounds simple, right?

That’s because it is. But this is not the end. There are some important terms and definitions you need to know about affiliate marketing.

So let’s dive into that.

Important Terms & Definitions In Affiliate Marketing

Before you get started with affiliate marketing, you need to know some important terms and their definitions.

Affiliate marketing is about three very important relationships. These three relationships are involved in any form of affiliate marketing.

These are:

Merchant
Affiliate
Customer

1. Merchant

The merchant is also known as the advertiser, product creator or seller. It is the merchant who sells the product.

In some affiliate programs, the merchant is directly involved but in most cases, they are not.

2. Affiliate

This is you. The person promoting the product is called the affiliate.

Whether you are promoting a product on your blog, through your email newsletter or by running ads, you are the affiliate who helps the merchant get his product sold to customers.

3. Customer

The customer is the party who buys the product. Without customers, no sales are generated and hence you don’t get any commissions.

Finding ideal customers is very important as an affiliate because it will help you generate sales for your merchant’s product.

Here are some more important affiliate marketing terms you should know:

1. Affiliate Manager

An affiliate manager is a person who manages the affiliate program for the merchant. They help affiliates increase their sales by ensuring that they use the best methods for the merchant’s product promotion.

2. Affiliate Link

An affiliate link is a link you use to promote merchant’s product. This link is unique for each affiliate and helps the merchant and affiliate program track the sales generated from each affiliate.

3. Affiliate Network

An affiliate network acts as a bridge between merchants and affiliates. Affiliate networks help the affiliate and the merchant by providing proper link tracking system, generating sales reports and also helping affiliates find the best merchants.

4. Cloaking

Cloaking means hiding the tracking code of an affiliate link.

5. Commission

The money merchants pay to the affiliate for generating a sale. The commissions are predefined.

6. CPA

CPA or Cost Per Action refers to the money paid to an affiliate for generating the desired outcome. This action could be signing up to a mailing list or buying a product.

7. CPC

CPC stands for Cost Per Click and it refers to the money paid to generate a click by a user on your website or link.

8. CPM

Cost Per Mille (Thousand) refers to the amount of money spent on advertising per 1000 impressions.

9. Impression

Impression means how many times your ad was shown on a page.

10. Landing Page

The page used to promote a product to generate sales or leads is called a landing page.

11. PPL

PPL stands for pay per lead and stands for the amount of commission per lead generated.

12. PPC

PPC or Pay Per Click stands for the amount of money paid to an affiliate by the merchant whenever a click on the affiliate link is generated.

13. ROI

ROI (Return On Investment) is a percentage or a ratio that is used to analyze the affiliate marketing efforts.

The formula for calculating ROI is:

ROI = (Gross profit – Investment) / Investment * 100

14. SEO

SEO refers to Search Engine Optimization. It is a practice of optimizing a website or a web page to get it rank higher on the search engines for the desired keywords or topics.

15. Split Testing

Split testing is also referred as A/B testing. It is the practice of testing two different variations of a web page, sales copy or advertisement to see which one performs better for your affiliate marketing goals.

16. Vertical

Vertical is also known as a niche is a specific topic.

Affiliate Marketing Methods With Examples

Now that you know the important affiliate marketing terms, it’s time to get started.

But here comes a problem:

How do I get started?

There are so many different affiliate marketing methods that many people get overwhelmed and they end up doing nothing.

That’s why here are the best affiliate marketing methods out there. I’ve also included examples of these methods to help you understand how each method works.

1. Content-Driven Affiliate Marketing

Content-driven affiliate marketing refers to using content as the backbone of your affiliate marketing success.

This can be done by writing content about the product you’re promoting. Blogging is the best way to get started with content-driven affiliate marketing.

All you need to do is to find a product you want to promote, start a blog about it and use it to generate affiliate sales.

Many affiliate marketers are making money solely from blogs.

Pat Flynn, who runs Smart Passive Income manages to make over $100,000 from affiliate marketing.

And most of his income comes from the products he promotes on his blog. Take a look at his income report:

SPI Affiliate Earnings

He makes over thousands in affiliate income just from one product and he promotes over 50 products on his blog.

Let’s take a look at a case study of an affiliate site that makes over $20,000 per month.

Case Study: Affiliate Site Making Over $20,000 per month

The website ThisIsWhyImBroke.com makes over $20k per month. They use Amazon Affiliate program, eBay affiliate program and other networks to generate money.

They promote products like gadgets, gizmos and quirky products. Just take this one for example:

Human Skull Fireplace Logs

Most of their traffic comes from the Reddit ads they run but this also brings extra social traffic as the products on the website have the potential to go viral.

You can read the full case study to learn more about the concept and how they did it.

There are many concepts out there you can use to start your own content-driven affiliate website.

Here are some resources that will guide you to get started:

2. PPC

We already discussed what PPC is. PPC affiliate marketing is not easy as there are not enough programs and networks that provide viable PPC affiliate campaigns.

But still, it is a great way to make money as an affiliate.

To make money from PPC, you basically display ads on search engines for the desired keywords.

Finding keywords and products is not easy. But don’t worry about it because I’ve mentioned the best affiliate networks later in the article.

Another problem is that many affiliate programs don’t allow using PPC to promote their products because then you are competing against them which is against their policies.

But some of these programs allow you to do PPC on Bing which can help you make a lot of money.

3. SEO

There are affiliate sites ranking for certain products just with the help of SEO. These are SEO affiliate sites that require a single landing page.

SEO-driven affiliate marketing is similar to content-driven affiliate marketing. The only difference here is that in SEO-driven sites, the main focus of getting traffic is from search engines.

So how do you get started with SEO-driven affiliate marketing?

Here are some tips that will help you.

A. Find keywords with high traffic volume and low competition

Finding keywords that aren’t competitive but have high search volume is the key to success. To do this, check the different products available on affiliate networks.

Analyze these products and find out whether they have a volume of searches or not. There are many products that have high searches on Google.

B. Create a landing page

In most cases, when you’re doing SEO-driven affiliate marketing you’re promoting a single product.

This is why buy a domain with the product name included in it. Before doing this, do check whether the merchant allows this.

After setting up the website, create a landing page and add some content about the product. Many merchants provide case studies of their products.

You can use that in your landing page as it will help you get more sales.

C. Rank it on Google

Depending on the competition of the keyword, you may have to build some links to your website.

And don’t make the mistake of not doing any On-page SEO for the landing page. Because in many cases, your website can rank by good content and On-page SEO.

4. Banner Ads

A very underrated affiliate marketing method is using banner ads.

You can display ads on high traffic website and generate sales to the product you’re promoting. The best part is that you don’t even have to create a website, write content or do SEO.

To get started with banner ads affiliate marketing, all you have to do is to find the product you want to promote and the website where you want to display the ad.

You can find websites to display ads on from BuySellAds.

Head over to BuySellAds and go to the marketplace.

BuySellAds Marketplace

You can select the category to find websites related to the product you’re promoting.

Let’s go to the health & fitness category to find websites with high traffic.

BuySellAds Marketplace Health & Fitness

I’m going to check Women’s Health & Fitness to see the ad spots available and the rates.

BuySellAds Women's Health & Fitness

As you can see, this website gets over 250,000 monthly impressions and there is one ad spot available on the right sidebar. The rate for this ad spot is $10 per thousand impressions which is not bad.

Now, all you have to do is to find a product such that your ROI is positive.

You can find other publishers on BuySellAds who charge less for ad placements.

This is how banner ads affiliate marketing works.

Now let us discuss some of the best affiliate networks.

List Of Affiliate Networks

1. Amazon Affiliate Program

Promoting Amazon products has helped many affiliate marketers make thousands of dollars per month.

Amazon Affiliate Program

With Amazon affiliate program, you can promote Amazon products on your website, email list or social media.

The commission is different for different categories. Finding products to promote is difficult because many products are already being promoted by marketers.

The website ThisIsWhyImBroke also makes money from Amazon affiliate.

Amazon Affiliate Program provides you with all the tools and resources required to promote a product. This includes affiliate links, banners, and reports of your affiliate income.

All in all, Amazon’s affiliate program is the best place to get started with affiliate marketing.

2. ClickBank

ClickBank is a marketplace for affiliate marketers. There are thousands of products available on ClickBank.

ClickBank

You can create affiliate links for any product you want to promote. The offers on ClickBank are highly paid and you can get a commission of 75% for the products you’re promoting.

The only disadvantage is that since there are so many products on ClickBank, finding the products worth promoting is not easy.

But still, ClickBank is one of the best affiliate networks and if you want to get started with it, I highly recommend watching this video.

3. CJ Affiliate by Conversant (Formerly Known As Commission Junction)

CJ is another affiliate marketplace like ClickBank. You can find thousands of products here and promote any product you want.

CJ Affiliate

Though, some products require approval. Signing up on CJ is free. While signing up, you’ll either have to enter your website URL or information about your newsletter.

Once you sign up, you can search for products, get product links and banners that can be used for promotion.

4. Shareasale

The last affiliate network I’m going to discuss is Shareasale. Just like ClickBank & CJ, you can find thousands of products to promote.

Shareasale

It provides you all the tools required as an affiliate. You can get detailed statistics of the product you’re promoting.

Now that you know about affiliate marketing, different affiliate marketing methods and affiliate networks, it’s time to share some tools and resources that will help you in your affiliate marketing journey.

Affiliate Marketing Tools & Resources

Let’s begin with some important affiliate marketing plugins for WordPress.

Affiliate Marketing Plugins For WordPress

1. Thirsty Affiliates

This is the best WordPress plugin for managing affiliate links. If you’re running an affiliate site, having this plugin will save you a lot of time.

Thirsty Affiliates

Some of the features of this plugin are:

Link Cloaking
Automatically generate affiliate links by providing keywords
Uncloak all links
Geolocation links
Detailed reports and statistics

2. Broken Link Checker

This plugin checks for broken links on your website and gives you notifications.

Broken Link Checker

Checking for broken links manually will eat up your time and this is why you should use this plugin.

3. Easy Pricing Tables

TablePress is a WordPress plugin to create beautiful tables in your blog.

Easy Pricing Tables

This plugin is helpful when you’re writing reviews of products and creating comparison posts.

4. WP Review

This plugin adds beautiful review boxes in your blog posts. Perfect for review based affiliate sites. You can increase your commission by displaying review boxes in your post.

WP Review