In 2009, I originally published this post, the 3 Types of Affiliate Marketing Explained—and The One I Profit From. A lot has changed since then, and I’ve learned a ton along the way about affiliate marketing the right way. It’s now October 2018, and I wanted to share those new insights here, with a bunch of new takeaways for you to bring affiliate marketing into your own business!
In this post, we’ll explore 3 main types of affiliate marketing:
- Unattached affiliate marketing
- Related affiliate marketing
- Involved affiliate marketing
Ready to dive in? Let’s do this.
In my November 2009 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. These terms represent 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 putting an affiliate link in front of someone via Google Adwords, Facebook ads, etc. in the hopes that they'll click on your link, buy the product, and earn a commission.
The reason why this type of affiliate marketing is so attractive to many is because no presence or authority 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 is it 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.
With this model, there’s pressure to focus more on the potential income rather than the customers you’re serving. That’s the dark side of affiliate marketing.
And that's not for me. In fact, in early 2009 I tried something similar once. I signed up for an affiliate network and found thousands of potential products I could promote. I chose one and spent about $250 dollars on Adwords hoping someone would click on the link and I'd get paid.
If you dabble in PPC affiliate marketing and it's working for you in a way that you’re instilling trust in your audience, I applaud you and wish you continued success. 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 on social media—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, which was an older advertising model where you could have advertisers pay for having specific terms on your website become links to their products. This was big in the blogosphere when I was just starting out. 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 okay. Placing affiliate links on your site that are related to your niche is a decent strategy to earn 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.
In my early days, I used to have a few of these links scattered throughout SPI—for example, an ad for a “How to Make an iPhone App” product. I used to have a few iPhone apps that generated an income for me each month, but I didn’t actually use the product I was linking to. I did, however, personally know the owner, which is why I trusted him and decided to place that ad there at the time.
Nowadays though, I don’t like to promote anything I haven’t tried and loved myself. How can I honestly say that I support a product if I don’t know everything there is to know about it?
If you don't promote the right products, even if you know the owner or think it might be a great fit, you run the risk of losing the trust you have built with your audience. It takes hard work to build authority and trust, and one bad affiliate offer could potentially ruin that, so be sure you trust the product you're recommending, and the team behind the product to take care of your people.
This is why, now, all 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 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.
Check out this video on how I've learned to make passive income with affiliate marketing:
It's your involvement and experience with the product that makes that offer so attractive. I talk about this and highlight my top performing affiliate marketing products and how they’ve performed so well in SPI Podcast session 293.
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. If it were up to me, this is 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.
Bluehost and ConvertKit are two examples of companies I’ve created long-term, thoughtful relationships with because I love their products, value their leadership, and feel great about recommending them to my audience because I know my audience will benefit from the web hosting of Bluehost and email marketing of ConvertKit.
These types of affiliate relationships are built on trust and authenticity. The same applies to how we should building relationships with our audiences.
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 used and have benefited you in some way is the best way to go.
Focus on trust and authenticity. Focus on serve first, not income first. Focus on what is best for your audience.
Be as involved as you can with the affiliate marketing process, and you'll see success with your affiliate income.
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