Is Affiliate Marketing Profitable?

‍It is, if you set up your programme well, consider your commission rates so they align with your margins and think about what offers you can afford to do. Affiliate marketing is often thought of as a high ROI channel, it definitely can be if you work with lower funnel partners and only on a cost per acquisition basis. I would also say that if you only work with lower funnel partners you aren’t getting the most out of the channel and chasing these metrics only could lead you into working with a limited mix of partners. Make the channel profitable by aligning it to your KPIs, understanding what good looks like for you and being open to testing different activities. 

We often talk about full funnel programmes, when I reference this it isn’t always in relation to attribution (great if you can do that but realistically not all brands are at that stage in the channel). It's more about not being solely reliant on one partner type and being considered in all partners and the role they play. Conversion partners like cashback and voucher for example are extremely profitable if you ensure you set the commission structure up well and are strategic in your offer use. But also working with content partners can be profitable if you take a long term view of the activity, expecting an editorial article to drive the same sales as a cashback partner in a week is unreasonable. 

For example you may spend £3k on an article inclusion in a well ranking editorial site, you might only track traffic and no sales for the first 3 months. However the article stays live for a year and beyond, you look back after a year that article has driven £6k at a steady month to month rate. You can see that that one piece of investment has longevity and a lifetime value. 

If you balance high impact conversion driving campaigns with well ranking and researched content you have a well balanced programme that delivers sales, brand awareness and creates longevity in the activity booked. 

The affiliate channel isn’t scary, it's a world of opportunity and the ability to amplify your brand's reach. Treat affiliates like any channel, set KPIs, understand what you can do, build gradually and in a considered way. 

Want to learn more? Check out our Affiliate Marketing for Beginners Guide.