Affiliate Marketing: What It Is and How to Get Started

Written by Coursera. Revised by smartjobconsult

Learn the ins and outs of affiliate marketing and how you can start doing it yourself.

Affiliate marketing is a marketing model in which third-party publishers promote a merchant’s goods or services and receive a percentage of the sales or web traffic made as a result. It is typically considered a key part of modern digital marketing.

Affiliate marketing appeals to businesses because it enables them to meet their marketing goals at a low cost. It benefits affiliates by offering them the opportunity to make passive income. Generating affiliate income requires developing a platform and building an online audience. In addition, it's essential to stay current with affiliate marketing industry trends. For example, according to Affiliate Insider, artificial intelligence (AI) and cloud software will play an increasing role in how affiliate marketers collect data to make decisions in 2025.

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What is affiliate marketing?

Affiliate marketing is a revenue-sharing marketing method in which a third-party affiliate, such as a blogger, YouTuber or influencer, advertises a business’s goods or services to help them meet sales or marketing goals. A business might work with an affiliate to achieve the following:

• Increase sales

• Attract more web traffic

• Improve brand awareness

• Connect with the affiliate's audience

For example, a shoe company could partner with a fitness blogger to reach the blogger's audience of fitness-minded readers. Through the blogger's efforts, the shoe company could experience more site visitors and boosted sales. Some of the new customers could go on to become long-term subscribers.

What makes affiliate marketing attractive is that businesses can partner with affiliates at a low cost. Typically, businesses offer their affiliate marketing partners such rewards or compensation as:

• Commissions (percentage of the sales)

• Free products and samples

• Exclusive rewards

• Networking opportunities

• Access to training or education

While revenue-sharing is not a new marketing concept, modern affiliate marketing usually refers to online digital marketing in which affiliates link to a business's product or service online and receive a percentage of sales or web traffic. Statista estimated that affiliate marketing spending would reach approximately $8.2 billion in 2022 [2].

How does affiliate marketing work?

Affiliate marketing involves four main actors, who each play a unique part in the marketing process:

• The affiliate (or “publisher”): The individual or entity that promotes the merchant’s product or service

• The merchant: The individual or entity selling the product or service that the affiliate promotes

• The affiliate network: An intermediary between an affiliate and a merchant’s affiliate program. While affiliates and merchants can connect without an affiliate network, it is a common channel for such relationships.

• The customer: The individual who purchases a product through an affiliate. Merchants partner with affiliates to connect with the affiliate’s audience and convert them into customers.

An affiliate can connect with merchants through affiliate marketing programs. After making some initial connections through a program, the affiliate may be able to find other appropriate merchants and gradually build a wide network of brand partners in a particular industry. For example, an affiliate marketing program might suggest a range of tech products to an affiliate who reviews cellphones. The affiliate can then build a network within this industry focus to reach new customers who are interested in tech products.

Occasionally, an affiliate and merchant connect organically through direct outreach. For instance, a merchant who manufactures cake pans might connect with an affiliate who blogs about baking in order to get their product in front of the affiliate’s audience of baking enthusiasts.

Affiliate marketing examples

You likely have seen examples of affiliate marketing before, even if you didn’t realize it. The reason is simple: the most effective affiliate marketing tends to be paired with quality content that readers enjoy and find useful. Although it can be tempting to promote various products to make sales and drive traffic for merchants, affiliates who have developed trust with their audience by highlighting quality products they believe in are more likely to inspire audience members to make a purchase. In other words: quality and relevance sells.

Some common examples of affiliate marketing include:

• Websites covering general topics that occasionally include affiliate links in blog posts or articles, such as in this list of Kitchen Essentials compiled by the cooking-focused website Kitchn.com.

• YouTube videos that include affiliate links in the description, such as the one attached to MKBHD’s “My Every Day Tech 2022” video.

• Dedicated review websites that cover products that appeal to a targeted readership, such as Gear Patrol and Wirecutter.

Affiliate marketing salary

Affiliate revenue is highly variable and can often fluctuate from year to year. Furthermore, it can take time for an affiliate marketer to build an online audience and make a profit.

Is affiliate marketing right for you?

Becoming an affiliate marketer and even building a thriving affiliate marketing business could be a rewarding career path for you. Here are four signs to look for as you consider taking the first steps:

1. You want to create an income stream based on your interests.

2. You want to build an online audience and create unique content that engages them.

3. You want to create partnerships with brands you love and promote their products to your audience.

4. You are ready to take on an entrepreneurial mindset to grow your affiliate marketing business.

How to start affiliate marketing

Ready to begin your journey? Follow the steps below to streamline the process.

1. Pick your niche.

Affiliate marketers are valuable to merchants because they can reach specific audiences composed of potential customers. The better you define your niche market, the easier it can be to build an affiliate platform and create original content that meets your audience's needs.

Affiliate marketing in action

OutdoorGearLab reviews outdoor equipment used for sports, camping, hiking, climbing, and travel. The site offers their readers value by testing, reviewing, and promoting equipment that outdoor enthusiasts like them would find useful. As a result of serving this niche audience,  OutdoorGearLab has become one of the most successful outdoor product review sites.  

Ideally, the niche you build your affiliate marketing efforts around should relate to your interests and those of a sizeable, underserved audience. As you brainstorm ideas, conduct research with Google Trends to discover what people are searching the internet for that might correlate to your niche topic.

In this exploratory phase, ask yourself the following questions:

• What is a topic, hobby, or field that is of particular interest to me that’s not currently being served?

• What physical products or digital products do I use that I would enjoy promoting to others?

• How can I add a new angle or perspective to a topic with a lot of competition?

• What kind of content would I like to make that would allow me to serve this niche and use my skill set?

2. Pick a marketing channel that matches your niche.

Once you decide on the topic, audience, and products your affiliate marketing brand will cover, you will want to decide on a marketing channel.

While creating a dedicated review website, such as OutdoorGearLab, is a popular approach, you can also do affiliate marketing on social media platforms like Instagram. You may find that one channel is more appropriate for your affiliate marketing goals than others or that a multi-channel or omnichannel marketing approach is best.

Some common approaches and channels include:

• A dedicated product review website specifically oriented around offering readers insights into products.

• A website or blog covering a specific topic that includes links to relevant affiliate products in articles or posts about that topic.     

• Social media platforms, such as Facebook, Instagram, Twitter, or YouTube, where you post content related to the products and brands you promote.

Elijah John