A HubSpot YouTube explainer (by Patrick Biddiscombe) introducing affiliate marketing as a low-cost, performance-based tactic where affiliates earn commissions for referred sales. The video covers advantages (low startup cost, low risk, expanded audience reach), differences from influencer marketing, a brief history (Amazon Associates, 1996), and guidance on which products/services fit affiliate models (noting fashion's ~25% share and commission/network fees of 10–50%). It includes CTAs to HubSpot resources.
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This global crisis has forced businesses around the world to tighten their belts. And the one area that's really felt the squeeze is marketing budgets, which have been cut in almost half over the past year. Kind of sucks. This has forced digital marketers to become extremely resourceful in order to achieve their goals. So what if I told you that there is a time tested marketing strategy with almost zero startup costs that can deliver steady revenue for almost any business? Well, in this video, I'm going to introduce you to affiliate marketing and all the ways it can be used by savvy marketers to generate sales and signups. To learn more, check the description below to download HubSpot's free Ultimate Guide to Affiliate Marketing. And while you're down there, click the subscribe button and ring the notifications bell while you're at it. HubSpot defines affiliate marketing as a performance based marketing tactic in which an online retailer rewards an affiliate with a commission for each customer it refers. The affiliate will get paid when their referral results in a transaction. Put even more simply for people like me who are slow readers, you know what I'm saying, Affiliate marketers help sell your product or service and receive a commission on what they sell. There are some obvious advantages to this arrangement. The first is relatively low cost of entry. With affiliate marketing, there's no need to spend a fortune on media buys or staffing large marketing departments. At its bare minimum, all you need to start an affiliate marketing program is the ability to recruit affiliates, track performance and make payments. And there are literally hundreds, thousands, maybe even millions and billions of affiliate marketing networks that provide these services. There are also niche affiliate networks that specialize in specific industries like health and wellness or specific products like software and digital goods. There's even one just for crypto trading. Off to the moon we go. You know what I'm saying? And there are networks that specialize in promoting specific demographics, like black owned businesses and other minority groups. Whatever network you choose, they'll match your brand with the right affiliates, provide the tools for them to sell your product and manage payments. The cost to you is usually just a modest setup fee and a percentage of the transactions the network facilitates. Which brings us to the second advantage of affiliate marketing. Low risk marketers spend billions of dollars on campaigns without much in the way of guarantees that a particular program will produce results. I did that once for Jamva. Still in the red. Never gonna make it out, frankly. Pray for me, with affiliate marketing, you only pay a commission once a sale is made. The cost of creating content and getting it to an Audience is all bore by the affiliate. That's why most affiliates are creators who already have an audience and are already looking for a way to monetize it. Which leads to affiliate marketing benefit number three. Affiliate marketers can expose your brand to a new audience that you aren't reaching through your own channels. And the best affiliates integrate your product in a way that is holistic with the rest of their content. That's important because 92% of consumers trust an influencer more than an advertisement or traditional celebrity endorsement. That's why like Mint Mobile, the whole thing with like Ryan Reynolds kind of worked. Kind of didn't work. So the less an affiliate marketing program feels like a sales pitch, the better it will usually perform. Now you might be asking, what's the difference between affiliate marketing and influencer marketing? The answer is no one knows. Just kidding. It's easy to understand why there's confusion between the two. After all, affiliate marketers are by definition influencers. And plenty of influencers make money by joining affiliate marketing programs. But generally speaking, influencer campaigns are really good at achieving KPIs like brand reach, awareness and sentiment, but not necessarily for driving sales. Plus, a lot of influencer marketing campaigns require the advertiser to pay a premium predetermined fee. This makes the risk of influencers marketing higher than affiliate marketing. Finally, influencer marketing generally requires you to pay a lot more attention to campaigns. In fact, 67% of marketers prefer their influencer marketing to be campaign based rather than always on affiliate marketing. Programs, on the other hand, tend to be long running and low maintenance. One of the world's first affiliate marketing programs succeeded by completely automating the process. Amazon's associates program in many ways invented modern affiliate marketing when it launched in 1996, which also happens to be the year that the Nintendo 64 was released. Coincidence? Yeah, probably. There had been online affiliate programs dating back to 1989, but they were executed via traditional deals with specific partners. Jeff Bezos idea was to allow anyone with a website to sell books, because that's all Amazon sold in 1996, just books. Anyone could sign up and get banners with custom URLs that let Amazon know where a sale was coming from and pay that affiliate a commission. Today it's estimated that 1% of websites in the world are part of Amazon's Associates network and they sell obviously a lot more than books. But let's take a step back and assume you're not going to invent a once in a generation retail revolution and become the world's richest man and try to battle the other world's richest man in a race to colonize Mars. I mean, you could do that. I just. I don't think it's probably gonna happen for you, unfortunately. Maybe you just think affiliate marketing could be a smart way to increase your business. If you are uncertain, start by considering what it is you're selling. Virtually any product or service can be sold via affiliate marketing, but some perform particularly well. Fashion is a major benefactor of affiliate marketing, making up 25% of the total industry. But almost as popular are things like financial products, travel, even dating. Don't ask me how I know that. Subscription boxes and services are also popular with affiliates because they create a recurring revenue stream that doesn't require a constant influx of new sales. Business and marketing services also do well with affiliate marketing. In fact, here's a little secret for you. HubSpot runs its own affiliate marketing program that allows partners to earn commissions with no signup fees or minimum sales requirements. So you might be asking, well, what doesn't work well with affiliate marketing? Jamal, Excellent question. Products and services with longer sales funnels have a harder time attributing sales and therefore commissions to affiliates. Another thing to consider is the margin on the item you're selling. Affiliate commissions and network fees can take anywhere from 10 to 50% of revenue. And off the top of each sale, the higher the percentage you offer, the more incentivized affiliates will be to push your product over someone else's. So if you're in a particularly high volume, low margin business, the numbers might not work out in your favor. But assuming yours is one of the millions of businesses that can use affiliate marketing to increase sales and profits, there's no better time to get started than right now. To learn more about growing your business through digital marketing, sign up and take the free HubSpot Academy course on digital marketing. And don't forget to subscribe to this channel for even more ways to grow your business. Now, if you'll excuse me, I'm going invent time travel, beat Jeff at his own game in 1996. Maybe you won't see me anymore after this. You know what I'm saying? Maybe I'll. Maybe I'll. Jambo blown up. Until then, I'll see you next time. And don't forget. And don't forget to subscribe. You know what? Forget subscribing. Don't even subscribe. Don't. Don't do it.
