13 Feb 2018
Every year Internet advertising market grows gradually. We see new platforms, social networks, online shops, searching engines appearing really fast and internet audience grows almost at the same pace, all this leads to advertising budgets increase. More and more people start wondering how to make money on the internet without founding online shops or new services. And solution actually exists – it is affiliate networks which gives an opportunity to start making money online.
There is enough information about business models, tools for working with affiliate networks on the internet but it is very difficult to acquire it due to the fact that it is too unstructured, different authors use different definitions and all this creates terrible mess in the heads of novice publishers.
Admitad Academy was brought to life to help beginners to understand information in the right order and to create their own efficient business models. Our primary task is to explain all sophisticated things in simple words, to show how it works and to provide all necessary data for making money through affiliate network.
So let’s get it started.
Who are these people
and what do they do here?
What is a CPA-network also called “affiliate program”? It is a system which consists of three parties:
First party is an advertiser who wants to sell their goods or services. Typical advertisers are online shops, services, games, applications, banks, travel agencies and many others. Obviously such companies have their own marketing, sales and PR departments, but as experience has proven it is just impossible to use and control all promotion and advertising channels.
Thus we can see that such companies need some help to lead their potential customers to make some action, for example to buy some goods or services, to subscribe to something or to download an application or some other action which advertiser wants them to do. And the best part of it is that such advertisers are ready to pay someone who will make their customers perform the required action. The cost per a performed action can be some exact sum or percentage from the cost of sold product. So here we can see what CPA is – Cost Per Action. In short, it is when advertisers pay someone for making their customers perform some action.
The second party is a publisher. Publishers are ready to help advertisers to promote their goods or services to the target audience. Each publisher chooses carefully potential customers (traffic) as they have to find right people and to make them buy/subscribe/download – perform certain action. If a publisher succeeds and an advertiser confirms that the action has been performed, the advertiser pays the publisher for this action. The scheme is simple. Moreover, publishers have many tools which can be used to boost their sales and profit. We will give details about tools a little bit later. But the most important thing is that it is not as easy as it may seem. Publishers have to work hard, test different tools, audiences and business models to achieve good results and high sales.
Finally comes the third party – an affiliate network (in our case it is Admitad) which exists to help advertisers and publishers to meet. Here publishers can see all programs which they can join but sometimes publishers need advertisers approval to join. A network fulfills many necessary tasks, for example it makes sure that there is no fraud like cookie stuffing (or cookie dropping) or that publishers attract only relevant audience – potential product customers. Furthermore an affiliate network provides statistics that shows which product was sold by which publisher. In order to do so the network provides publisher with the special link which includes the information about the selling product.
Let’s take huge online shop Lamoda which sells clothes, shoes and accessories as an example. This shop is ready to pay 10% of the cost of sold goods to those who sell them. But how can they found somebody who will attract target audience and promote their products?
That is the time when Lamoda decides to join the affiliate network Admitad as an advertiser. The shop decides what they want to sell, for instance only some kinds of goods like shoes or exact categories of goods. Lamoda posts its offer with all conditions and the cost which they are ready to pay for one sold product. A publisher sees this offer in the Admitad catalogue of offers and realizes that he/she owns corresponding advertising space, for example beauty blog, where he/she can promote this offer.
A publisher decides to join take this offer and sends the application to Lamoda Managers who check if the publisher’s advertising space corresponds to their requirements. If everything is fine, the advertiser approves the application.Then the publisher starts his/her work, at this point it is very important to understand which way of promotion is the most relevant to the publisher’s channel. If it is a beauty blog, the publisher can create a nice and interesting post about cocktail dresses and attach to this post photos from Lamoda website and the link to the best dresses selection.This link includes publisher’s id and id of his/her blog, thus Lamoda sees that the customer found out about dresses via the publisher’s blog.
After the customer orders a dress and pays for it Lamoda make verifications. When the shop sees that its sales statistics coincides with sales shown in Admitad statistics, they pay the cost to the publisher.
I have decided to make money with CPA. How shall I start?
So you have made up your mind on joining the affiliate network as a publisher and ready to start making money. First of all you need a business model (better not one). What is a business model?
Let’s pretend that business model is a structure which consists of three main elements. We should review all elements altogether as if we look at them separately, we will not understand how everything works and how business models become efficient.
Product that we are going to sell. There is a wide range of offers in affiliate networks (in the network Admitad you can find them in the section “All programs”). In the program review you can find all essential information about the program: which company it is, what it does/sells, which action it requires (sale or lead, download, subscription), the rate which will show how much you can earn for one action. You may also find some special conditions such as exact range of audience age or only certain area for promotion (i.e. only Europe of U.S.). Advertisers are entitled to choose which traffic sources or tools can be used for promoting their goods, they can choose which publisher can join their offer as well. The program review has also average statistics section. It shows the conversion rate, how many orders are usually approved, how many customers bought the product after clicking the link and much more information for analysis.
Choosing the right offer may be a tough decision for a novice publisher, there are several features upon which you can choose an offer: based on the reward rate (if you want to make money either selling few expensive products or many cheap ones); on the traffic sources or tools (i.e. advertiser wants to attract traffic only from Youtube and you have a channel), on statistics (conversion or approval rates) and other features. But to be honest we always recommend to choose the offer in accordance with your interests: if you like to play video games, check gaming offers, if you like makeup, choose offers from “Beauty and Health” section. The reason why we give such recommendation is simple – if you know the product you promote and its target audience, it will be much easier for you to choose the right tools and ways of promotion.
Advertising space where you will attract the target audience to the product. Before choosing the advertising space ask yourself some simple questions: which ad spaces do you know well? Can you afford to promote it? Where can you find the target audience of the products you promote? Which space would be the most popular among potential customers? And which space will be the easiest to boost? In short, an advertising space is a place on the internet where you will post your affiliate link. Here is a list of the most popular advertising spaces among publishers: :
Social Networks (Facebook, Twitter, YouTube, Pinterest, VKontakte or social networks which are used in your country),
Messengers (WhatsApp, Skype, Viber, Telegram, Facebook Messenger),
Applications (applications and games),
Web extensions (toolbars, bookmarks).
Traffic — your website visitors/subscribers/video viewers which you attract. Basically it is the number of people who saw your advertising link on your advertising space. The more relevant (interesting for your audience) content you post the more people will click on your link. Here is the list of channels which can be traffic sources and advertising spaces at the same time:
Contextual advertising (including on brand),
Managing wrong traffic.
So as we can see there are three main elements of successful business model: attractive offer + convenient advertising space + traffic. Your task is to make it look so good that everybody wants it and also to post it on the space where most of your audience can see it. Below are the most popular business models which help publishers to earn money:
Cashback (you give back part of cost of purchase),
Comparison websites (on one website you display different prices for one product from different offers),
Review website (you ask if people like some product and post its link. Other people leave comments how much they like it and how happy they are that they have bought it),
Goods recommendations (in addition to purchase, complementary goods),
Goods and services catalogues (website where people can find different goods or services, but in order to buy them, they are transferred to go to online shop website),
Loyalty programs (promo codes, coupons, discounts which customers can get if they click the affiliate link),
Sale of certain goods (you attach link to some certain product, and then you can paste this link in text or wherever you need),
Arbitrage (you pay for advertisements at some spaces less than advertiser will pay you for actions, thus you earn from the difference of these costs)
Retargeting (suggestion to the customer to come back to the cart and finish his/her purchase),
Content projects (blogs, forums, reviews, articles — useful information in text, video or photo formats with attached links to them),
White label (possibility to open someone’s online service on your advertising space).
There are far more business models which publishers use to earn with CPA. Such models have appeared as a result of different combinations of offers and advertising spaces, and, of course, as a result of many efforts, tests and hard work of publishers. We believe that much more can be created, so you can try and come up with your own efficient business model which will be used by many publishers later.
To help publishers to ease their work, many additional technical tools were created. Here is a list of such tools:
for work with catalogues (XML-feed),
for work with videos and photos (photo tags and integrating links for videos),
Let’s take a look at how it works: potential customer sees your link and decides to click it, he/she is transferred to the advertiser’s website and performs a required action (buy/subscribe etc.). Having confirmed this action the advertiser pays for it. The more customers perform required actions, the more you get paid. Here are several tips on what you should do to increase the number of actions: а) make the offer so attractive that customers gets crazy to click and buy what’s promoted, b) make sure that advertising space is trustworthy, c) increase the number of people who visit your advertising space. You should do all this at once in order to get good results.
An example how to do
Let’s pretend that we live in a perfect world and in the beginning of december one of your secret channels tells you that in some time golden coats will be in fashion. You gather all offers with golden coats at one pretty landing page and name it goldencoat.com, then you start contextual advertising for the request “golden coat”. Your secret source was right and one perfect morning Kardashian family, Donald Trump and his wife appear wearing golden coats and everybody decides to buy it. They start searching for them and see your website, click the affiliate links and order the coats on the websites of advertisers whose links you’ve posted. As a result you earn much money.
Now let’s look at it in details. Looks perfect, doesn’t it?
Chosen product is in fashion and it has strict features (golden coat) but it is still easy to find several offers with this product (golden coats by different brands). Plus it’s the right season for promoting winter coats – beginning of winter.
Chosen advertising space is also relevant for promoting the product: pretty landing page which can be created in one day by using free forms. The page allows to display many products at once and compare their prices what is a great benefit for customers.
Attracting relevant traffic to the advertising space is rather fast and cheap. You launch contextual advertising for the words “golden coat”, “to buy golden coat” and other similar word combinations. As you knew in advance that the golden coats would be in fashion, you started the promotion campaign earlier than others, so your proposal is unique. Due to great demand for the coats, people will come to your website and click different links. Thereby the search engines will assume that your website is useful and will move it higher in the search results. And let’s be honest, hardly it is possible that there are many websites dedicated to golden coats only on the internet.
Good combination of product, advertising place and traffic has led to high sales. But, unfortunately, we do not live in a perfect world and this situation was made up. In reality it is hard to predict what will be in fashion, but it is not impossible. Publishers can make some researches and check what may become popular. For example if we know that in a few months a famous superhero movie will be on screen, a publisher can create a cool landing page with clothes and accessories on superhero subject. Many fans will be happy to buy such stuff.
An example how not to do
Sometimes it does not go as we planned.
Some novice publishers think that it is easy to make money just from one post. For example one publisher sees a good profitable offer (an advertiser pays well for selling dresses) and decides to promote cocktail dresses at his group in a social network. He posts a nice photo with a simple phrase “Buy the best dresses through this link”. He expected his followers to start buying the dresses at once, but as a matter of fact he doesn’t have many followers and these followers aren’t interested in cocktail dresses because he has a group of fishing lovers. So is it still possible to improve this situation? Yes, it is. Here are some tips how to do it:
Choose some offer that your audience will be interested in. For example, in this case the publisher can choose fishing equipment and plus offer some bonuses (promo codes, cashback or comparison of prices on different website).
What if half of your followers are bots and not real people? Then you have to change it and increase number of real followers of your group. As bots will not make any actions for which you will be paid. There are several ways to increase number of real followers: firstly, if you are not ready to pay for it, you can contact groups of similar subjects (hunting/real men hobbies) and exchange the advertisements that will attract some followers. If you can pay for your group promotions, there are far more opportunities – we will describe them in our following articles.
The more attention you pay to analytics and the more you do, the more efficient your business model will be. You have to keep repeating these steps: create new business model – launch it – check the results – adjust – launch again – repeat till the moment the business model becomes successful and starts bringing you money.
Affiliate programs can bring huge amounts of money, but for that you must work really hard and think before doing. This market keeps growing and you can make money on it through working and spending time and sometimes investing some money in it.
I am ready to work hard. When will I start receiving my money?
So how long will it take to withdraw money to the card since the moment you have received the affiliate link?
Even if you did everything in time, launched a very successful business model and actually sold many goods for good commission, it is too early to celebrate. Advertisers need time to confirm your sale, to check if the traffic source was allowed, if the customer bought via your link and to verify statistics. Time when advertisers verify and check all details is called average hold time. During this time the advertiser can confirm or decline the sale. There are many reasons why advertisers can decline the sales, for example traffic source was not allowed or the customer did not pay for the order. Also some affiliate networks shows how much time a company needs to pay webmasters – it is called average payment time.
Let’s take online games as an example, it is not enough if customer just download/install or register in a game, an advertiser needs to make sure that the customer actually plays it, so it can take from five days to several months.
When it comes to physical consumer goods (clothes, cosmetics, digital devices, flowers, presents and so on), the advertiser needs time to deliver them and get paid for them – on average it’s held for 30-45 days.
And finally the most difficult and the best orders are expensive household equipment, vehicles, furniture, hotels booking, flight tickets, tours, financial offers. It usually takes much longer to make decision on purchasing such products because customers want to be sure, to check everything, probably, to watch several reviews on the internet and get some advices from their friends or relatives. Or regarding travelling offers, it happens very seldom that people just buy tours and travel the very next day. It is more likely that travelers plan their vacations and book everything in advance, sometimes it can be even 6 months earlier than actual trip. Several problems can occur with such kinds of goods. For example it can take from several months to one year to verify and approve such sale. And what’s worse, it is very hard to track the customer who found the goods via your link but went to actual shop to buy it, that is why the approval rate of such goods is often low.
Summing up we should say that you can receive your first money in about a week after start but according to experience you will be able to payout it in a month or so (you cannot payout small sums).
There is one more thing that you should know about – cookies lifetime and the concept Last cookie win. Cookie — is data which are attached to the user and he/she can be tracked via this cookie. This may include logins and passwords on different websites (so that you do not need to log in every time), personal preferences and what is important for a publisher – which affiliate link the customer used. So if you posted an affiliate link and a customer saw it, clicked on it then something disturbed him and he left the website or simply he decided to compare this product with similar ones, the information that he had clicked your affiliate link will be kept within cookie lifetime if this customer did not click any other affiliate link of another publisher. And here we can see what Last Cookie Win concept is — the advertiser pays to the publisher whose affiliate link was clicked last. It means that if a customer clicked your link firstly, but then clicked someone else’s link, that last link will work and that publisher will get the payment. That is why publishers should make really attractive promotions so that customers want to buy promoted products at once.
Tips: launch several campaigns at once, test them, create something unique for your offers and be patient. Advertising campaign should be developed and expanded so that they will start bringing money.
When will I become a millionaire?
In order to wake up a millionaire one beautiful day, you should place a bet of all your money on bitcoin/casino or something like that. But at the same time after doing so you can wake up a broke the very next beautiful day.
But you can actually wake up a rich publisher one day, although you have to work hard for that. Sometimes it may seem that affiliate networks just gives money for doing nothing, but it is not like that in reality. CPA networks work with huge online shops and services, banks and other advertisers who provide more and more offers for promotion and this leads to drastic annual growth. Advertisers should see your efficiency so that they will want to keep working with you, and moreover you’d better be more efficient than their Sales, PR or Marketing Departments.
If you would like to have large scale affiliate campaigns, you should invest in them, you can take this expenses as investments in your own business. But, of course, you can earn much money through affiliate network not investing big sums in your campaigns. Such cases actually exist, for doing so a publisher should analyse his/her actions, know good traffic sources (popular bloggers for example) or attract with your cool ideas, make right decisions fast, use intuition and so on. Once again: it is possible, but you should work for it.
So why should I work with affiliate networks?
Let’s cheer up, affiliate networks are not that bad and there are many advantages of working with them. As follows below:
First of all – money. Here we can compare work with affiliate network with being an employer. When you work for a company you know that there is always a last step of your career stairs, it means that you will stop developing at some point of your career and you will always depend on your employee. On the contrary when you work with affiliate networks you are your boss, all your earnings are up to you and depend only on how many efforts you have made, it is like having your own business. You earn as much as you work converting your time, money and efforts in profit.
Expansion. The amount of money you can earn depends only on your ambitions and determination. The only thing that can set limits in this business is time. It is only you who can decide how much time to spend on campaigns, how to spend this time and if it is going to be your full-time business or a side job.
You do not need a special degree for working with affiliate programs, although knowledge and experience in marketing, PR or sales will be of help. There are no courses which will teach you how to work in this business. But, well, you can find out everything by yourself, you just need to be patient and curious. And, of course, you need some source which would aggregate and structure all useful information, show practical cases and explain everything, and here comes Admitad Academy which does it all.