3 Types of Affiliate Marketing Explained, And The One I Profit From

affiliate marketing explained In my latest monthly income report, you may have noticed that my affiliate income had surpassed my direct income from the electronic products that I sell online. I received a lot of comments, asking me to explain more about where my affiliate income comes from and how it works.

Instead of just breaking down where it all came from – how much this, and how much that – I decided to turn this post into something a little bit more useful that would do more than just tell you how much I earned. Again, I’m not here to show you the money I make online, I’m here to show you how I make money online, and what I’ve learned along the way.

When thinking specifically about affiliate income, I determined that I could divide how people earn money as an affiliate into three primary categories: Unattached, Related, and Involved. I’m speaking in terms of how we are associated with the product or products we may be an affiliate for.

Unattached Affiliate Marketing

These are your basic pay-per-click affiliate marketing campaigns where you have no presence and no authority in the niche of the product you’re promoting. There’s no connection between you and the end consumer, and all you’re doing is showing an affiliate link in front of someone’s face via Google Adwords, Facebook ads or whatever, in hopes that they’ll click on your link, buy the product, and you’ll earn a commission.

The reason why this type of affiliate marketing is so attractive to many is because no presence or authority in a niche is needed! It takes time to build up a reputation and trust with certain groups of people online, and many people are just too scared to commit to working on a blog or website, or just don’t have the time. For many, this is their only option.

Personally, I don’t like this business model because to me, this is not a business model. It’s an income generating model – yes, but a business model where I can build relationships with the end user – no. With PPC affiliate marketing, you become a behind the scenes middle man.

Not for me.

If you dabble in PPC affiliate marketing and are in the positive, I applaud you and I wish you continued success. Trust me, it’s a lot more difficult than it sounds, so props to those of you finding success with it.

Related Affiliate Marketing

Another form of affiliate marketing is what I like to call related affiliate marketing. This is where you have some sort of presence online, whether it’s through a blog, a podcast, videos, or whatever – and you have affiliate links to products related to your niche, but they’re for products you don’t actually use.

Back when text link ads were a big deal, I remember seeing every single “make money online” website with a 125 x 125 pixel advertisement for text link ads. Most of these sites did not actually use the text link ad service on their own sites. On many personal finance blogs, you’ll see a lot of different affiliate advertisements for things like ING, Everbank, LendingClub, and numerous other financial institutions. I doubt that every person who places one of those links on their blog actually uses each of those products and services.

And that’s ok.

Placing affiliate links on your site that are related to your niche is a great strategy to earn an extra income. Whether it’s in the sidebar in banner form, or in a text link at the bottom of your blog post, because you have a website and some authority, people will trust you and your decision to place the ad on your site.

I do have a few of these kinds of links scattered throughout this site. In the sidebar, you’ll see (at the moment) an ad for a “How to Make an iPhone App” product. Many of you know I do have a few iPhone apps that generate an income for me each month, but I did not use this product. I do, however, personally know the owner, which is why I trust him and decided to place that ad there.

Related affiliate marketing is great, but I can tell you that 95% of my affiliate marketing comes from the last type of affiliate marketing I’d like to talk about…

Involved Affiliate Marketing

Involved affiliate marketing is where you’ve used a product or service, truly believe in it, and personally recommend it to your audience. Not in a banner ad or somewhere that says “recommended resources”, but within your content, as part of your life and your strategy for whatever it is you’re talking about. The product almost becomes something people “have to have”, because it’s part of the process.

It’s your involvement and experience with the product that makes that offer so attractive.

There is, however, a level of responsibility that you have to uphold while making these kinds of recommendations, especially if you have a lot of authority and influence over your followers. This is something I take very seriously – even more so now that this blog has become so popular in such a short period of time. If it were up to me, this the only way affiliate marketing would be done, because to me it’s the most honest and most helpful.

This is the complete opposite of PPC, where you’re not even seen by the consumer in order for the transaction to take place. Instead, this is you talking directly to those who may need a product that you’re offering, who have their ears and eyes on you. This is not using your money in order to make money, like with PPC. It’s using your reputation, trust and authority in order to get others to take your recommendation, use it, and pay you something in return in the form of a commission.

My Affiliate Income

Last month, I made $5,023.33 in affiliate sales, and like I said, about 95% of that came from offering products that I’ve used and put my word behind.

Most of it comes from my LEED website. I do sell my own study guides, as you know, but I am also an affiliate for a company who sells practice exams as well. I thought about creating practice exams of my own, but this company is so good at what they do, (I used them to help me pass my test back in March of 2008), that it wouldn’t be fair to my customers if I tried to take their money by creating my own practice exams and kept them from this wonderful resource.

So, instead of creating my own, I have a page on my blog that recommends these exams, and within my eBooks, I talk about how I didn’t include practice exams because the best ones are available from this company, which I’ve personally used to help me pass. Of course, I put an affiliate link within the eBook, which is something you can’t do with a hardcopy book (unless you buy a domain that redirects to an affiliate link, which you can mention in that hardcopy, but that’s a whole other blog post).

I even go into tips for taking practice exams within my eBook, but again – I don’t offer include them, but I offer the affiliate link to where you can get them. Taking practice exams is part of the process that many people feel is necessary to achieve a higher score, and I offer my recommendation through an affiliate link to fulfill that need.

On this blog, I’m sure you’ve seen me personally recommend the Internet Business Mastery Academy before, and I do that because they helped my internet business get to that next level when I was starting out, I’m still a member today, and I truly believe in the program.

To respect the companies I’m an affiliate for, I don’t think I should present exactly how much I earn from eachI hope you can understand. I will tell you, however, that the Internet Business Mastery Academy affiliate program pays a recurring monthly commission, which is awesome.

I’m also an affiliate for a “Make Money Writing for eHow” guide, which I’ve talked about in numerous posts and how it helped me increase my eHow earnings, with numbers to back it up. This has been another great affiliate product that earns me a decent income each month as well.

So, to conclude, I would say that you can choose which kind of affiliate marketing works best for you, unattached, related, or involved, but in my experience, using your authority and presence in a niche to recommend products that you’ve actually used that have actually benefited you in some way is the best way to go. I think people will feel more confortable investing in products recommended in this way because:

They have some kind of proof that it works,
They have a resource to go to for help; and
They know to to blame if it doesn’t work.

Be as involved as you can with the affiliate marketing process and you will see success with your affiliate income.

Thanks everyone! My eBook is finished, and it’s just waiting on a couple videos and you’ll have free access to it very soon. Thanks to all of those on my Facebook Fan Page who have helped me with the name.

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Posted on : December 14th, 2009

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45 Comments (Click Here to Leave a Comment Below)

Reply Henri on December 14th, 2009 at 6:46 am

Heya Pat. I just found your blog and it rocks. I make my income mainly from affiliate marketing myself and have to agree that promoting products that you use and love is one of the best and most fulfilling ways to make money as an affiliate marketer. You can always make money in other ways, but you also have to take in happiness into the equation, without that you’ll just give up. At least that has been my experience.

Reply Pat on December 14th, 2009 at 12:22 pm

Thanks Henri! I’m glad you’re enjoying the blog. By the way, I checked out wake up cloud, and you’ve got a blog that rocks too! I’ve actually never seen a thesis theme look like that, very well done

Thanks for your comment, and I hope to hear from you again soon!

Reply Henri on December 14th, 2009 at 3:36 pm
Thanks a lot. I’ll be hanging around!

Reply Antti Kokkonen on December 14th, 2009 at 7:08 am

Great post Pat. I like the unattached-related-involved classification. You provided great explanation what kind of affiliate marketing has worked for you.

I’m sure it’ll benefit many to see that recommending the products you really can go a long way AND how affiliate marketing can be a great supplement for your own products.
In your example, the exams were perfect additional resource for the original product, and as a bonus there was affiliate commissions to be made. Thanks a lot for sharing this!

Reply Pat on December 14th, 2009 at 12:27 pm

Hey Antti! I’m glad you liked the classifications I pointed out. If you can find something that supplements (you chose a perfect word), your own products, that will help your customers, that will definitely be a winner, whether it’s something of your own (like an audio book is to an eBook), or something you’re promoting as an affiliate.

Reply Darryl on December 14th, 2009 at 7:15 am

Hey Pat. I’ve been reading your blog for a few months now and I just wanted to say great job! I especially enjoyed this article. I agree that promoting what you use is the way to go. I wasn’t comfortable with the idea of affiliate marketing until I realized that it could be done this way.

Reply Pat on December 14th, 2009 at 12:32 pm

Hey Darryl,

Thanks for your comment! It’s always cool to hear that I sparked something in a long time reader to comment

Yeah, the PPC affiliate model, which is the one we usually hear about the most, if definitely not for me, but it feels good to actually provide something useful to someone that I’ve used, and get paid for it at the same time

Reply Julie @ Write for eHow on December 14th, 2009 at 7:35 am

Pat, great post! I’ve experimented with many online revenue streams but affiliate marketing is starting to emerge as my favorite. Thanks for this breakdown.

Reply Pat on December 14th, 2009 at 12:33 pm
Thanks Julie! I hope all is well and I wish you a wonderful holiday! Cheers!

Reply Howie on December 14th, 2009 at 7:57 am
Great post, Pat! As usual…
- Reply Pat on December 14th, 2009 at 12:33 pm
  Thanks Howie!

Reply Making things happen on December 14th, 2009 at 9:05 am

Getting things done is not the same as making
things happen.
You can…
…reply to email.
…pay the bills.
…cross off to-do’s.
…fulfill your obligation.
…repeat what you heard.
…go with the flow.
…anticipate roadblocks.
…aim for “good enough.”
Or you can…
…organize a community.
…take a risk.
…set ambitious goals.
…give more than you take.
…change perceptions.
…forge a new path.
…create possibility.
…demand excellence.
Don’t worry too much about getting things
done.
Make things happen.

Reply Pat on December 14th, 2009 at 12:34 pm
Love this breakdown, thanks for your insight!

Reply Hynek Palatin on December 15th, 2009 at 3:49 pm

This was actually written by Gina Trapani and published in Seth Godin’s What Matters Now:
http://sethgodin.typepad.com/seths_blog/2009/12/what-matters-now-get-the-free-ebook.html

Reply Pat on December 15th, 2009 at 7:27 pm

Really? I had no idea. I’ll definitely have to check this out. Thanks Hynek! I appreciate you showing us this, I’m sure it’s valuable, like anything else from Seth.

Reply moon_h on December 14th, 2009 at 9:11 am

Hey Pat,

Fun to read about what kind of affiliate marketing you dabble in. I’ll be dabbling in affiliate marketing next year, probably starting with ppc campaigns.

Of course, the best would be to create your own product, but like you, I like to be honest, and won’t create/sell one until I know I can put my best forward.

Have fun holidays! I can’t wait to check out SD. My road trip is *almost* here

Reply Pat on December 14th, 2009 at 12:37 pm

Haha, isn’t “dabble” a fun word.

Anyways, you’re right, if you can create your own product, you’ll not only give yourself the possibility of earning more money than you would by selling an affiliate product, but you’ll get some more authority in your niche as the creator of the product as well. But yeah, the number one priority should be the customer’s needs, so if their needs can be fulfilled through something that isn’t my own, it’s nice to point them in that direction but still get a cut for it

Happy holidays to you too, and have fun on your trip!!!

Reply Dustin | Engaged Marriage on December 14th, 2009 at 10:22 am

Thanks for breaking this down so clearly. I still have not found much in the way of affiliate products that I really love in my niche (marriage). I take that as a sign that I need to create a killer product of my own.

Reply Pat on December 14th, 2009 at 12:40 pm

Hey Dustin,

Yea, I’ve never really come across any “marriage” products, however you’d obviously have to be more specific in your approach to what you’d want to sell, which I’m sure you know already.

There is a well-known relationship product that’s all about getting back the person you broke up with. I forget the name though, but that’s a good one because there’s fear and massive want involved with that product.

For “live a happier marriage” product, it might be tough because you’d have to convince couples that their marriage isn’t as happy as it could be, and you’d have to get both to agree, or else there could be some “what? you think we need to read this!” type of thing, and then they’d end up looking for that “getting back with your partner” product, hehe.

Sorry this is so long, but I’m sure with the great content you have and the rapid growth of your blog, you’ll find something that works for you Good luck!

Reply Patrenia on December 14th, 2009 at 11:30 am
Thanks Pat…you have given me some great ideas. I can’t wait to read the E-book
- Reply Pat on December 14th, 2009 at 12:41 pm
  Thanks Patrenia! I can’t wait to get it out there for everyone too! Cheers!

Reply Nate on December 14th, 2009 at 12:53 pm

I agree…I think it’s good to promote products you use or have used. It makes it that much easier to ’sell’ to others because you’ve used it. In fact, now that I say that, it almost doesn’t even seem like selling. It’s helping others…and that’s why I promote products I’ve used. I want to help others. I want to provide solutions to their problems and if it’s a product I’ve used and benefited from then I be all means want to share that with others.

Good advice here. Thank you for sharing.

Reply Pat on December 15th, 2009 at 3:44 am

Hey Nate! Thanks for your comment. You’re right, when you’ve just recommending a product you’ve used, it’s not even really “selling” anymore. Nicely put. Thanks Nate!

Reply Tony on December 14th, 2009 at 1:00 pm

Great post Pat. I’ve started dabbling with different forms of affiliate marketing recently and this post gives me more motivation to start my own blog.

Reply Pat on December 15th, 2009 at 3:45 am

Hey thanks Tony! Oh, and by the way, congrats on the recent success of your beer website! I heard you were making some sales this holiday season. Awesome

Reply Andy Hough on December 14th, 2009 at 1:35 pm

It is the last type of affiliate marketing that makes money for me as well although I don’t make much affiliate income. I find if I write a post about a product I have a good chance of making some affiliate sales but I almost never make an affiliate sale just by having a link in the sidebar.

Reply Pat on December 15th, 2009 at 3:46 am

Andy, you gotta start somewhere, and if you’re making some money already, there’s no reason why you can’t make even more later. Keep up the great work!

Reply Ms. Freeman on December 14th, 2009 at 3:54 pm

I can definitely see the benefits of using ‘Involved Affiliate Marketing’, although it does require a deep commitment to a product.

My questions is: What if you are gung ho (is that spelled correctly?) about a product and you sell it in post after post and pitch it left and right and then for some reason later down the line you find the product is no longer relevant or of good quality any more. What happens to all those previous posts? That is something I have always wondered about. I mean is it appropriate to leave the links there or would you have to go back and remove them?

P.S. I am very interested in the E-How manual, I am almost at the check out phase….hmmm should I?

Reply Pat on December 15th, 2009 at 3:49 am

Hey Ms. Freeman!

You propose a great question, and honestly, I think it’s up to you as the affiliate for that product. If you truly believe it’s not worth leaving up there, then I would just add updates to the blog posts, and take the links out of the text. It’s definitely a personal judgement call, but I’ve never had any issues like this. Hopefully, I won’t ever

And as far as this eBook, I hope it can meet everyone’s expectations!

Reply Ms. Freeman on December 15th, 2009 at 9:34 am
Thanks for your feedback. If the eBook is anything like your blog then it is well worth the wait

Reply Ms. Freeman on December 14th, 2009 at 3:55 pm
P.S.S this has got to be the most anticipated EBooks out there. I can hardly wait!

Reply Jason on December 14th, 2009 at 4:03 pm

Pat,

Affiliate marketing definitely seems like the best way to go when it comes to monetizing a blog. However, what is the best way to approach a company regarding affiliate marketing?

Also, what kind of readership does one need to be at before an affiliate marketing program becomes possible?

Thanks for the help,

Reply Pat on December 15th, 2009 at 3:52 am

Hey Jason, great questions.

For some companies, if you’re into the PPC stuff, you don’t even need their permission. You can simply sign up for an affiliate network, like Commission Junction, Neverblue, or Market Leverage, and promote their list of thousands of products to people.

Other sites, like blogs with information products, also allow people to sign up freely. For these (and the PPC stuff as well), you can start with 0 readership, but obviously the more readership you have, the more money YOU will make. The companies won’t really get mad at you for trying, because you’re not losing money for them.

If you’re going with a private website that isn’t a part of those affiliate networks, or has a public way to sign up as a partner, then you’ll have to indeed have some kind of readership so you can prove it will be worth their time and effort to promote their products. Again, some might be ok letting anyone do it because they aren’t losing any money from you trying.

The best metric is probably unique visitors per day, just so you know. I hope this helps! Cheers!

Reply Jason on December 15th, 2009 at 6:13 am

Thanks for your help with this.

In your opinion, what size of readership should a blog have in order to really capitalize on either form of marketing?

I understand with PPC readership can be low and the more readers I obtain the better my odds are at generating money.

However, with “Affiliate” marketing what do you believe is a readership size necessary to attract this type of marketing?

Thanks…

Pat on December 15th, 2009 at 2:10 pm

With PPC, you don’t need any readership at all to capitalize, since your readers are going to be involved in the process.

With the related and involved affiliate marketing, it’s hard to put a number on it, but I’d even say that you could begin to see success with it from 50 to 100 subscribers. Honestly it depends on a lot of factors more than just readership. It depends on the niche, how much money your readers have to spend, how well you promote the products, the design of your site, what day it is. I wouldn’t worry about it too much, I’d just do it, see what happens, and then figure out what needs to be improved from there.

Reply Shane on December 15th, 2009 at 6:11 am

Very interesting perspective on different kinds of affiliate marketing. I’m also mainly doing the involved thing, but at the same time, I’m always building some minisites and stuff that I am unattached to.
It’s a bit of a “don’t keep all your eggs in one basket” thing. And I also like to test new techniques and software on some of the minisites before going at my main blogs with them.

Reply Pat on December 15th, 2009 at 2:11 pm

Shane, I think it’s definitely a great idea to diversify, and using mini-sites that you’re not directly connected to is awesome for getting another stream of income without putting too much effort into it, after it’s all setup. Keep up the good work!

Reply Jeff Rose on December 17th, 2009 at 10:11 am

Pat-

Another awesome and informative post. You give such tremendous detail -almost the golden ticket- to succeed. Keep it up!

Reply Pat on December 17th, 2009 at 10:26 pm
Thanks Jeff! Willy Wonka says hi

Reply Azad Shaikh on December 19th, 2009 at 2:08 am

I think i have to find affiliates that’s work for me. I had signed up with my affiliates programs but not yet promoting it. Hope after my exams are over i can work on them.

I like those affiliates which provide passive income not one time commissions (like domain name affiliates and hosting)affiliates.

Any suggestion for passive income affiliates.

Azad Shaikh
http://www.internetgeeks.org

Reply Pat on December 19th, 2009 at 2:45 am

A lot of membership-type products, where people pay month after month, will sometimes offer a recurring commission. Just think of things that people have to pay over and over for, each month, or year, etc. Promoting E-Junkie, for example, has an affiliate program like this as well.

Reply Menandro Tomas on December 22nd, 2009 at 3:08 am

Using the products you promote is really a good advice because it will be easier for you to promote. You could accurately identify the features and benefits that it can do for your customers. Great Pat

Reply Kevin @ SuperSmartEbook on December 27th, 2009 at 11:55 pm

This post is exactly just what I needed, a friend of mine just asked this very same questions and I was searching on the internet whilst browsing your blog.

I’m just gonna retweet this to him.

Thank you! Thank you!

Reply Nicole Dean, Busy Marketer's Coach on December 30th, 2009 at 4:19 pm

I wanted to say “Thanks” for your level of transparency.

Also, I’ve found several resources here that I haven’t seen before – and they look great. I’m definitely checking into them further.

I agree completely about the level of intimacy with the products that we promote. I absolutely earn the most money with affiliate marketing when I promote products that I personally use and believe in.

Reply Dominic on January 10th, 2010 at 1:25 pm

Hey Pat,

I just found your blog today. Great blog! Also, a very interesting article! I’ve done some affiliate marketing. The marketing I’ve done thus far doesn’t necessarily fall under the third model; it’s probably closer to the second model. I’m interested in promoting a program that falls under your third model–particularly in the area of computer programming. However, I haven’t found any programs. Maybe, I’ll start a programming blog, and give Amazon a try. Do you think I could make a decent income from writing programming tutorials while linking to programming books at Amazon .com? Can you please offer suggestions on ways I could monetize this niche?