How Affiliate Marketing Works With Cashback

What is Affiliate Marketing?

Affiliate marketing

Anyone who visits a marketing website, attends a marketing conference or reads books on marketing and advertising is repeatedly confronted with the term "affiliate marketing". This form of marketing has been an integral part of the marketing industry for decades and the majority of those responsible for marketing have included it in their integrated marketing plans. Even though it's so widespread, there are still a lot of questions about what affiliate marketing exactly is and how it can benefit businesses of all types.

The definition of "affiliate"

According to the Oxford Dictionaries, if we were looking for a definition of "affiliate" it would mean "officially joining or associating with an organization". This way of connecting is typical of a trend that can be observed in the international corporate landscape. More and more companies are finding ways to work together in order to achieve more clout and sustainable success in the long term - especially in competition with larger companies. One of the most effective ways to do this is affiliate marketing, which can be defined as follows: "A marketing agreement where an online retailer pays an external website a commission based on traffic generated or sales generated from their referrals. " (Oxford, 2019)

It's about partnerships

So affiliate marketing is about companies working together to bring as much sales as possible to individual merchants. The stronger this partnership is and the closer it is worked together, the better the results will be. Within these partnerships, a distinction is made between two main groups: (1) advertisers and (2) publishers.

  1. Advertisers are the merchants who want to sell their products and services using affiliate marketing (or other types of marketing and promotion);
  2. Publishers are websites and platforms that present advertisers' promotional offers to their visitors and members in order to generate traffic and sales.
The best results can be achieved when these two groups coordinate their customer base and set up targeted campaigns. Different target groups demand different messages and campaigns, so a close partnership is necessary to get the most out of the connection.

Affiliate marketing in eCommerce - a win-win situation

Even if myWorld and its Cashback World brand also apply this affiliate marketing principle to its offline offers for SMEs and chain stores, the largest area of ‚Äč‚Äčapplication of affiliate marketing is clearly in eCommerce. For advertisers and publishers in the online sector, it is possible to automate all affiliate marketing activities, which creates a "convenient" way to generate either additional traffic or additional sales and thus additional income by using the existing visitor and the customer base is opened to advertisers. Because of this efficient collaboration, dealers, websites and platforms create a unique win-win situation for everyone involved.

Payment only in case of success

The main benefit of affiliate marketing is that, in most cases, advertisers only have to pay for the traffic or sales generated. There are different payment models. The most common commission models for publishers are:

  • CPC - "Cost per Click": This means that the advertiser pays for all clicks on advertising material and the resulting traffic.
  • CPL - "Cost per Lead": Here the advertiser pays for every lead that is generated. What corresponds to a lead can be defined in different ways: For example, leaving contact details on the advertiser's website or requesting a meeting or advice.
  • CPA / CPS - "Cost per Acquisition" / "Cost per Sale": The advertiser pays the publisher for every turnover generated by his advertising.
By offering these payment models as part of their marketing activities, an advertiser can achieve additional, and sometimes even enormous, reach and thereby build their brand while only paying for the ultimate sales or traffic generated by these marketing activities. Since this takes place in the digital world, everything can also be measured, which makes this type of marketing much more effective and efficient than traditional advertising measures such as print ads or posters.

Affiliate marketing is therefore a compulsory part of every marketing plan - this is especially true for any company that is serious about eCommerce.

Cashback World E-Commerce offers you a number of options - find out more!