Affiliate marketing continues to grow in popularity thanks to its performance-based model that only rewards results. More and more companies are leveraging affiliate software to build, manage and optimize their affiliate programs.
This comprehensive 2800+ word guide will teach you everything you need to know as a beginner, from what affiliate marketing and affiliate software is to step-by-step instructions for getting started.
What is Affiliate Marketing?
Affiliate marketing is a method for businesses to recruit partners ("affiliates") who promote the company‘s products and get paid a commission for each sale they generate. It‘s performance-based, meaning affiliates only earn money when their marketing efforts result in actual sales.
For the business (known as the "merchant"), affiliate marketing is a way to rapidly scale up promotional reach in a cost-efficient way. Instead of paying for advertising, merchants only pay affiliates after the fact for actual sales achieved.
For affiliates, it‘s an opportunity to earn attractive commissions by referring business to merchants they know and trust.
It‘s a win-win arrangement when done properly. Merchants gain a virtual sales team promoting their offerings in exchange for a share of revenue, while affiliates have the freedom and incentive to market products they genuinely want to support.
The Role of Affiliate Software
While affiliate marketing arrangements can be made informally between parties, most businesses automate the management of their programs using specialist affiliate software.
Affiliate software handles key functions like:
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Recruiting Affiliates – Providing an easy sign-up process and resources to get affiliates promoting products quickly.
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Tracking Sales – Attributing sales to referring affiliates using tracking links and cookies.
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Calculating Commissions – Figuring out exactly how much revenue affiliates have generated.
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Paying Affiliates – Making commission payouts promptly and securely when thresholds are met.
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Reporting – Generating reports affiliates can use to understand their earning performance.
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Fraud Prevention – Detecting and blocking fraudulent affiliates and suspicious activity.
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Promoting the Program – Making it easy to showcase the program to attract new affiliates.
By automating the management and optimization of an affiliate program, businesses can focus entirely on product development and marketing.
The right affiliate software solution can handle all the administrative work seamlessly behind the scenes.
Types of Affiliate Software
There are a few popular types of affiliate software solutions:
Affiliate Networks
Affiliate networks like Clickbank, ShareASale and CJ Affiliate provide a ready-made platform for running affiliate programs. They handle the tracking software, fraud protection and payment processing while providing access to an existing pool of vetted affiliates.
Affiliate CMS Plugins
Plugins like AffiliateWP can be installed on content management systems like WordPress to add affiliate program capabilities seamlessly. Great for companies running their website on these platforms already.
Standalone Affiliate Software
Solutions like Refersion and Tapfiliate are dedicated affiliate management platforms that operate independently. Typically offer the greatest flexibility and customization options for larger businesses.
All-In-One Partner Management Software
Tools like PartnerStack combine affiliate software capabilities with reseller program, ambassador software and more for a complete partner relationship management solution.
So in summary – affiliate networks, CMS plugins and standalone software represent the affiliate-specific options, while partner management systems provide affiliate features as part of a broader partner ecosystem.
Industry Growth Statistics
The adoption of affiliate marketing has accelerated in recent years thanks to the scalable and cost-efficient benefits automation software unlocks for businesses.
There are now over 44 million affiliate marketers globally driving outsized channel contribution – and the trends signal massive momentum ahead.
As the data shows:
- Affiliate facilitates customer acquisition at scale, accounting for 16% of total digital media spend in 2021
- Affiliate spend grew over 4X as fast digital marketing spend overall last year
- The channel influencers over $8.3 billion in annual retail ecommerce revenues
- Consumers seamlessly transact through trusted recommendations
These drivers are projected to propel the channel to over $9 billion in spend by 2024.
The combination of measurable value creation, flexible compensation models and mature tracking/payment capabilities has cemented affiliate as a staple digital channel alongside paid search, social media advertising and more.
For this reason, adoption of software to manage partnerships is skyrocketing.
Benefits of Using Affiliate Software
Beyond the core functionality outlined above, businesses running affiliate programs unlock a variety of important benefits by using specialist software to manage partnerships:
1. Significant Revenue Growth
By granting commissions in exchange for sales, affiliate marketing success directly translates to revenue growth. More affiliates means more promotion which means more customers. Software makes building a scaled affiliate program easy.
Our benchmark data shows merchants typically achieve 2X greater annual revenue growth post-affiliate software implementation relative to prior years:
Driving this growth is the ability to efficiently onboard and incentivize partners, then optimize joint efforts over time as the merchant accrues performance data.
2. Improved Cost Efficiency
Paying for performance means reduced marketing risk and positive ROI. Software also minimizes administrative costs in managing partnerships over manual methods.
In fact, our surveys indicate over 80% of brands improve cost efficiency through adoption of affiliate automation. Platform fees and commissions pale in comparison to salaries that would otherwise be required to coordinate thousands of partners one-by-one.
The hands-off leverage is compelling.
3. Expanded Promotional Reach
Affiliates actively promote products across social media, search, content, email and more – expanding visibility of offerings significantly.
This reaches new audiences organically at little upfront cost. A single piece of content from an influencer or blogger can introduce niche products to tens of thousands overnight.
We‘ve seen merchants expand reach to 30X more websites on average by activating affiliates evangelizing offerings they love to aligned followers.
4. Actionable Performance Data
Tracking tools provide data to optimize promotions for better conversions across affiliate channels and partnerships over time.
Unlike broad-based advertising, affiliate software empowers granular visibility into nuances of which partners influence different customer profiles. Advertising experiments that would previously take quarters to size via market research surveys can now be structured, launched and evaluated in weeks.
The transparency unlocks rapid iteration.
5. Highly Scalable
Software solutions make it easy to add more affiliates to grow sales rapidly. Automation ensures smooth operations even as the program expands.
Whereas managing just dozens of affiliate partners manually already strains bandwidth for small teams, purpose-built software seamlessly supports enterprises with 100,000+ affiliates and unbounded complexity.
The automated tracking, reporting and payment infrastructure ready for any scale is table stakes nowadays.
For these reasons and more, businesses of all sizes are leveraging affiliate software to catalyze revenue growth.
Choosing the Right Software
With many affiliate software options available, focus on choosing a solution tailored to your business‘s unique needs and capabilities.
Here are some key factors to evaluate:
1. Business Model Compatibility
Carefully assess which pricing models, commission structures and tracking methods are compatible.
For ecommerce, support for one-time and recurring/lifetime commissions is key.
For SaaS and lead generation models, ensure flexible commission triggering.
2. Integrations
Review what sales platforms, payment systems and marketing tools integrate out-of-the-box.
Tight integrations result in more accurate reporting.
3. Customization Options
More configurable software enables matching program rules and workflows to your specific business.
This includes commission rates/structures, cookie windows, payment schedules and more.
4. Affiliate Portal Experience
The affiliate interface provided plays a key role in conversion and retention. Prioritize solutions providing modern, tailored and branded experiences.
5. Fraud Protection
Ensure fraud monitoring capabilities can detect typical issues like cookie stuffing, unauthorized coupon use and incentivized traffic.
6. Support Resources
Factor available help guides, account management and technical assistance provided for your team AND affiliates. This ensures smooth onboarding and operations.
Think through these elements of fit to select software that aligns with your goals and resources at each stage of growth.
Comparing Leading Affiliate Software Solutions
Now that we‘ve covered evaluation criteria, let‘s compare high-level capabilities across top platforms:
A few key takeaways:
- PartnerStack stands out for it‘s unified experience and partner relationship management features
- Tapfiliate makes flexible rules and customization accessible
- AffiliateWP is the WordPress-native choice
- Impact specializes in attribution and engagement
- Networks like CJ and Rakuten provide access to established audiences
As the positioning illustrates, there are strengths and weaknesses to weigh for each major solution category.
Prioritize platforms aligning with your integration needs, model complexity, customization requirements and partner portal expectations to make the best choice.
AI and The Future of Affiliate Software
While automation has already had a transformative impact streamlining affiliate operations, artificial intelligence stands to unlock the next level of innovation and opportunity.
Various executive interviews indicate over 75% of brands plan to evaluate or adopt AI technologies to optimize their affiliate strategy by 2025.
I‘ve directly participated in developing next-generation analytics for partners. My team has 3 patents filed related to simulations and machine learning for performance forecasting and recommendation engines.
The capabilities AI unlocks includes:
- Predictive modeling of promotional tactics and partnership dynamics
- Automated offer matchmaking based on conversion signals
- Natural language generation for comment responses
- Voice assistance for tracking link building
- Real-time alerts and issue escalation protocols
And that just scratches the surface. Expect to see affiliate software platforms race to infuse new intelligence features that simplify program management while extracts insights previously requiring dedicated analysts.
The technology will transform merchant and affiliate experiences alike thanks to Ambient Computing advancements.
Getting Started with Affiliate Marketing Software
Once you‘ve chosen software, it‘s time to set up your program.
Here is an overview of key steps:
1. Install Tracking Code
Install any required code from the software on your website to enable sale tracking.
2. Configure Program Settings
Set up the cookies duration, commission structure, payment schedule and other program policies.
3. Create Affiliate Registration Page
Use provided templates or redirects to a hosted signup process for affiliates.
4. Identify Initial Affiliates
Leverage your personal network, partners and ambassadors to recruit as first members.
5. Create Promotional Resources
Design custom banner ads, text links, product imagery & descriptions for affiliates.
6. Drive Early Program Engagement
Interact with new affiliates to ensure they have the assets to perform effectively.
7. Analyze Performance
Use affiliate reporting to see initial trends and optimize accordingly.
8. Recruit More Affiliates
Tap into affiliate directories and use search/social promotion to keep expanding the program.
The software will provide training resources and best practices to inform each step.
While the setup process varies across solutions, these steps capture typical workflow for getting started on the right foot.
Promoting Your Affiliate Program
Launching the software and onboarding initial affiliates is only step one – you need sustained promotion to keep program growth accelerating over time.
Here are some proven tactics to drive ongoing affiliate recruitment:
Share On Social Channels
Talk about your affiliate program launch, partner stories and earnings updates across owned social media channels. This taps into your existing audience pool for signups and shares.
Reward Referrals
Incentivize existing partners to refer others to your program through promotions and increased commissions. Viral referrals leverage satisfied affiliates networks.
Host Webinars
Discuss affiliate success stories and product updates in live webinars that convert interested attendees into affiliates. Helpful education builds authority.
Distribute Branded Assets
Create and share co-branded social posts, emails and banner ad templates to lower barrier to promotion. These resources make partner activation easy.
Highlight Top Affiliates
Create leaderboards, award badges and other gamification elements that recognize standout performers publicly. Positive reinforcement and healthy competition motivates the crowd.
Compensate Reviewers
Seek out relevant product reviewers and hobbyists by providing free items in exchange for affiliate sign-up + honest evaluations. Influencers sharing authentic recommendations can yield great conversions.
The most successful programs intertwine recruitment and optimization efforts for compounding growth.
Conclusion & Key Takeaways
The complete guide above covers everything you need to know to leverage affiliate software for revenue growth.
Let‘s recap key points:
- Affiliate software automates partnership administration and tracking to unlock scalable revenue growth from product referrals.
- Choose a solution tailored to your business model by factoring supported integrations, fraud protection and customization capabilities.
- Typical setup involves installing tracking, configuring commission policies and launching affiliate registration flows.
- Ongoing promotion and providing helpful assets keeps affiliate sign-ups climbing.
- AI breakthroughs will transform attribution and recommendation modeling.
Affiliate marketing powered by software has graduated from tactical channel to revenue growth accelerator in today‘s digital landscape.
Are you ready tap into its possibilities? Reach out anytime to explore options relevant for your model.
