Affiliate Marketing, sometimes known as "Partnership Marketing", is a performance-based channel in which an online advertiser (a brand) pays a commission to an affiliate for any sales or leads that were generated from their referrals.

Affiliate Marketing is widely used across all verticals and is fast becoming an essential channel in a brand's marketing mix.

Affiliates, also known as "Publishers" or "Partners", come in all shapes and sizes. These are the people or companies that will promote your products or services to their audience.

One of the most exciting elements of the affiliate world is the diversity of affiliate types that you can work with. This could be a blog, a price comparison website, a cashback site, a news or editorial website, and app, an influencer, or even another brand!

There are several key benefits to affiliate marketing that make it an attractive and lucrative channel for businesses:

Return on Investment (ROI): the affiliate & partnership marketing channel typically boasts very high ROIs, especially when compared to other marketing channels.

Low Risk: as a performance-based channel, businesses only pay a commission when a sale or action takes place, making it risk-averse.

Reach & Exposure: you can get your brand in front of huge audiences by partnering with the right websites. There are also many opportunities for increased exposure.

Variety of Opportunities: partnerships come in all shapes and sizes, and the diversity of opportunities that exist in this channel are endless!

Agencies have their finger on the pulse of the industry and are always on top of the latest affiliate partnership opportunities. We understand how to navigate the complexities of the channel and have a relationship with top industry partners.

We act as an extension of your marketing team, tailoring a service that is specific to your business goals. An outsourced specialist agency will provide a high level of expertise and will manage all aspects of the affiliate program including program launch, partner recruitment, campaign planning & execution, strategy, budget management, integrations, account administration & maintenance.

Affiliate Marketing is a channel that requires a lot resource to stay on top of the latest and greatest opportunities that exist in this space. It is a complex channel that is built on relationships.

Because of this, it’s quite difficult to find the right level of experience at larger agencies. Unfortunately, many of the generalist marketing agencies treat affiliate partnerships as an afterthought, upselling a basic level of service to their clients because they have to.

An Affiliate Network is an online SaaS platform that has several key functions: it provides robust tracking solutions to track affiliate activity, it serves as a meeting ground for affiliates and brands to connect and form partnerships, it records and pays out affiliate commission, and it provides reporting and analysis of your affiliate activity.

Affiliate Agencies provide end-to-end affiliate program management services and work alongside the affiliate networks. If you work with an affiliate agency, you will also need to sign-up to an affiliate network.

BlueGum works closely with all of the major affiliate networks and can advise on which one to sign-up to.

There are a lot of great options to choose form!

Each affiliate network, or SaaS platform will have its pros and cons, and the best choice is very much on a case by case basis, depending on size of the business, available budget, technical requirements, and vertical.

BlueGum works across all of the major networks and platforms. We’re always happy to provide advice on which network/platform to use for your affiliate program.

There are several types of fees when running an affiliate program:

Commission: this is what you will pay affiliate partners for generating sales or leads for your business. This is typically a % of the basket value, but can also be a fixed amount.

Optional Media Fees: these days, the partnerships channel extends past traditional commission-only fees. Some opportunities will be on a Cost-per-Click, Cost-per-Impression, or fixed placement fee. Tenancy fees are a common type of fixed placement fee that you pay to receive additional exposure with larger industry partners (e.g. newsletter inclusion, homepage banners, app-notifications).

Network / SaaS platform Fees: Depending on your platform of choice, and the level or service involved, you will pay a monthly access fee, along with a performance-based fee which is linked to the amount of revenue being generated through the affiliate program.

Agency Fees: If you are using an agency, you will be paying fees for the management of your affiliate program. These fees vary, but are usually a combination of a monthly retainer, and performance-based fees.

Although there are quite a few different types of fees involved, the good news is that it’s relatively simple to plug these costs into a forecast and calculate the potential return on investment.

At BlueGum, we always dig into the numbers to make sure that the channel will provide value, and a net positive for our clients.

Your commission rate should be based on your margins when taking into account all costs, and benchmarked against competitors.

A good rule of thumb is to make your commission rates attractive, but still have enough leeway to increase the rates for short term marketing campaigns, or for your best affiliates.

Typically, integrating and launching an affiliate program takes around 2-3 weeks. This is almost always dependent on how quickly an advertiser can get everything ready for launch. If you are well organised, you can launch in a matter of days or even hours. The single longest element for launching is the integration of the affiliate tracking code, so make sure to have dedicated technical resources available for this. For more information on launching an affiliate program, check out our guide in the resources section.

The biggest industry partners are usually quite quick to integrate new brands so expect a lot of growth within the first few months.

That being said, Affiliate & Partnership Marketing is a long-term marketing strategy. The overall goal is to increase revenue month by month as you work with more and more partners, and optimise existing partnerships.

This will be heavily dependent on the types of affiliates that you are open to working with, your vertical, your commission rate, your market share, amongst other variables.

You will often hear that, on average, a mature affiliate program will contribute around 15% of overall business revenue.

Our agency believes that quality comes first. It’s easy to generate more affiliate revenue for a business, but it might not be adding much value!

Traditionally, the term “Affiliate Marketing” was used to represent an industry where advertisers pay a commission based on performance.

As the affiliate channel evolved, it started to encompass all kinds of different partnership opportunities, many of which were not purely commission-based. Examples include influencer marketing, display advertising, paid search, or sponsored content - all of which are currently accessible through affiliate partnerships. For this reason, the industry has started to move towards the terms “Partnership Marketing” and “Affiliate & Partnership Marketing”.