Understanding Affiliate Marketing Ecosystem: What Is Affiliate Network? – Phonexa Canada

Phonexa

17 minute read

Businesses have been relying on affiliate marketing to generate more profits for a long time.

Amazon was one of the first to introduce an affiliate program in the 1990s. Owners of websites could earn commissions by simply linking to Amazon’s products. In the modern world, Amazon boasts the biggest affiliate network worldwide.

Affiliate marketing consistently generates substantial profits for entrepreneurs while continuously boosting sales. Since 2012, the spending tripled, reaching $8.2 billion.

Source: Statista

In the vast digital landscape of online marketing, the biggest affiliate networks stand as robust gateways to impressive earning potential and boundless success. In this environment, advertisers and publishers can prosper together.

When marketers join the best affiliate marketing networks, they can use creative marketing materials and expert guidance on optimizing campaigns.

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We’re about to start a journey through affiliate networks, where imaginative thinking and clever tactics can open the door to a profitable online experience.

What Are Affiliate Networks?

Think of affiliate marketing as a friendly handshake between businesses and individuals, teaming up harmoniously to boost sales and share rewards.

The main idea behind affiliate marketing is that marketers focus only on promoting goods. Unlike traditional businesses, affiliates aren’t responsible for creating products, handling inventory, or offering customer support.

Network affiliates can do their best, namely driving traffic and sales, while the product creators manage the logistics.

What is an affiliate network?

Affiliate networks open doors to a global audience. Your marketing efforts can attract diverse customers from different locations and walks of life.

At its core, affiliate networks act as a mediator between brands and affiliates (publishers). This is an online platform with advertisers demonstrating their goods and seeking niche experts among publishers to run ad campaigns and bring in high-quality traffic. More often than not, publishers rely on a variety of channels, including:

• Websites
• Social media
• Email campaigns
• Paid ads

The performance-based affiliate marketing approach is favored by many online entrepreneurs due to its cost-effectiveness.

When an affiliate generates a successful sale, subscription, or any other target action, both parties make a profit, making it a win-win scenario.

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Wondering what is the best affiliate network? Discover the 2021 affiliate marketing landscape, featuring the top affiliate marketing platforms:

Source: Statista

Duties of the Affiliate Parties

Without further ado, let’s examine the basic participants of affiliate network marketing:

Brands collaborate with network affiliates to reach a global audience and increase brand awareness. They pay a commission for every successful sale or lead provided by affiliates.

Affiliates are usually social media influencers or bloggers who direct traffic and potential customers to the merchant’s website. They advertise products or services using blogs or affiliate network sites.

The success of the entire affiliate marketing ecosystem is based on effective leads and high-intent clients who bring income to affiliate network advertisers and affiliates. Affiliate networks are intermediaries connecting main parties. Affiliate networks track, report, and pay out commissions.

Success in affiliate marketing requires constant improvement according to customer needs and trends of the best affiliate marketplaces. It is a great idea to integrate a good marketing technology stack containing a CRM system and affiliate management software. The solutions will help entrepreneurs manage partner and performance marketing issues.

Brief Description of the Affiliate Marketing Ecosystem

The structure of a performance-based affiliate marketing network consists of such elements as:

1. Purpose: Affiliated networks must ensure effective and beneficial partnerships between advertisers and publishers to generate sales and improve revenue for both parties.
2. Affiliate links & tracking: When affiliates join a program, they get specific affiliate links. These tools track the visitors and sales they bring, making it easy to rate commissions precisely.
3. Performance metrics: Best affiliate networks measure performance using key metrics like clicks, leads, sales, conversion rates, and revenue generated.
4. Payment & commission: Different affiliate providers and merchants have varying payment tools, commission setups, and schedules for paying affiliates.
5. Legal aspects: Affiliate networks establish certain guidelines that affiliates need to follow when promoting products. Following the rules guarantees lawful marketing practices, and marketing networks and affiliates maintain a good reputation.

However, this is only the tip of the iceberg since the affiliate marketer must know how to generate leads and manage them properly. This is significant for affiliate network marketing to reveal most of their business potential.

Businesses can effortlessly deliver leads to multiple buyers based on specific criteria, filters, and prices, enabling real-time call bidding and lead acquisition. Phonexa’s LMS Sync, a comprehensive lead management system, does the following:

• Enhances lead tracking, distribution, and analytics
• Revitalizes inactive leads
• Drives business growth

What Are Network Affiliates and Their Benefits?

Affiliate partners are people, businesses, or websites that promote products or services and get paid a commission.

The principle of affiliate marketing is built upon a revenue-sharing model, where affiliates are rewarded for driving traffic and sales to the merchant’s website or affiliate platforms.

The network affiliates join the best affiliate marketing platforms offered by companies. They receive exclusive affiliate links for dissemination through diverse affiliate channels like websites, blogs, social media, and email.

Network affiliates are beneficial for modern online businesses for the following reasons:

1. Through a partnership with affiliates, brands can take advantage of the affiliate’s existing audience, expanding their reach to many new customers.
2. Affiliates often focus on specific topics or groups of people. When entrepreneurs cooperate with network affiliates, they may reach and engage many specific types of customers.
3. Affiliate marketing programs provide important information and insights about different affiliates, advertising methods, and how customers behave. This helps businesses optimize their marketing strategies for more substantial results.
4. Outsourcing the marketing efforts to affiliates allows businesses to focus on their key products or services, leaving the promotion to experienced marketers.

With network affiliate marketing, companies can grow their customer base and sales without paying for initial marketing, and affiliates can earn money without having to create their products.

How Do Affiliate Networks Work?

The affiliate marketing ecosystem involves various entities known as affiliated network parties.

How to build an affiliate network? Let’s first check out the major participants of the affiliate marketing programs and deals:

Source: Affiliate Tracking Software: How To Improve Attribution & Maximize Profit

The affiliate network plays a key role, connecting all the parties involved and significantly facilitating and streamlining the operation.

To comprehend how affiliate network works, let’s take a closer look at the process. The first stage is to collaborate with the best affiliate networks for merchants.

As a merchant, you don’t have to create your own affiliate network. Instead of developing your program, you can partner with the best affiliate networks on the market.

The network will help you promote specific offers and find the best affiliates to handle them. All you need to do is define the demographics, geos, type of traffic, restrictions, commission rates, and target actions.

Brands can work directly with affiliates or seek reputable and responsible parties of the network affiliation. Companies should research thoroughly to hire affiliates or businesses with relevant audiences.

Before affiliates start promoting, they get access to different marketing materials from networks. Affiliates incorporate promotion resources into their online platforms using unique affiliate links or tracking codes.

Affiliate advertising networks connect companies with affiliates who help promote their products or services using cookies and specific links. When a consumer clicks on one of those links, the affiliate network software determines which clicks came from certain affiliate campaigns.

Let’s take an example of affiliate program networks in the fitness industry:

1. A well-known fitness equipment maker wants to increase sales, so they launch an affiliate platform. They set up a website network with special materials for affiliates to use in their promotions.
2. Affiliates sign up for the affiliate network program and receive personalized referral links. They can now promote branded fitness products on their blogs, social media, or YouTube channels.
3. Then a potential customer clicks the affiliate link with fitness ads and completes a purchase. Other target actions include signing up for a service, and the affiliate network software records it.

It is a situation where everyone benefits:

• Customers get a great product.
• The entrepreneur gets a new potential customer.
• The affiliate program network rewards the affiliate.

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Merchants analyze the return on investment (ROI) and other performance metrics to assess campaign effectiveness and optimize as needed. Watching how things go and keeping track of performance helps brands figure out what works best.

Prominent merchants focus on building trusting relationships with their affiliates. The latter must provide valuable content that persuades users to click on their affiliate links. All parties have to comply with advertising regulations to maintain trust between participants of network affiliate marketing.

Best affiliate networks provide numerous entrepreneurs and content creators with a huge revenue stream.

The growth of e-commerce and digital marketing has made network affiliate marketing more popular. Promoting products or services online gives a money-making chance for those who want to earn.

Types of Affiliate Networks

Check out and compare different affiliate network examples on the web:

• Traditional affiliate networks — third-party affiliate network platforms that connect merchants with a vast network of network affiliates. They offer diverse solutions across different niches for affiliates to promote.
• Niche-specific affiliate networks — platforms focusing on specific industries or product categories. They provide specialized expertise and targeted audiences for better conversion rates. For instance, finance affiliate networks, insurance call affiliate networks, PPC affiliate networks, and others.
• In-house affiliate programs — private affiliate networks handled by merchants themselves without using third-party networks. They control affiliate network management, tracking, and commission payouts directly.

The tracking mechanisms allow merchants and affiliates to leverage affiliate advertising networks effectively for successful and rewarding partnerships. What are they?

• Cookies — tiny text files saved on the user’s browser while engaging with an affiliate link. The most popular affiliate network tool contains unique identifiers that help track the user’s actions on the merchant’s website, even if they leave and return later.
• Referral links — unique URLs used in affiliate programs to promote a brand. When visitors click these links, the affiliate network software records the referral and attributes any subsequent conversions to the affiliate.
• Other technologies — some affiliate networks employ advanced tracking technologies, such as server-to-server tracking or mobile affiliate networks.

Lynx is part of Phonexa’s affiliate marketing software, offering performance marketers the data and tools they need to make the most of their affiliate marketing efforts.

It provides users with granular analytics, empowering businesses to scale efficiently. Its advanced affiliate network tracking capabilities enable brands to closely monitor offers, focusing on relevant data points for accurate attribution and performance analysis.

The critical role of mobile affiliate networks is to ensure transparency and accuracy in tracking conversions. Mobile affiliate networks provide reporting tools to monitor the performance of affiliate campaigns. They drive user acquisition and marketing for mobile apps and services.

On a separate note, let’s also talk about sub-affiliate networks. This type of network operates on a second-tier level within the affiliate marketing ecosystem. Here are a few characteristics to consider:

1. This model has two levels of affiliates: the primary affiliate (typically a traditional affiliate) and the sub-affiliate.
2. The primary network affiliate recruits sub-affiliates to promote the advertiser’s products or services through the primary affiliate’s unique tracking link.
3. When a sub-affiliate generates a sale or lead, the primary affiliate receives a commission from the traditional affiliated network. Then, the traditional affiliate pays a percentage of that commission to the sub-affiliate.

A traditional affiliates network connects advertisers directly to individual affiliates. In contrast, sub-affiliate networks include extra affiliates brought in by main affiliates to promote offers in the regular affiliate network.

How about ad network vs. affiliate network? They are important in digital marketing and offer diverse opportunities for businesses and people who create content. Let’s see a comparison table that includes the dissimilarities and functions of ad networks and affiliate networks:

Affiliate ad networks and affiliate networks serve different purposes, and their effectiveness depends on the specific goals and strategies of advertisers and merchants.

Some businesses might succeed by combining both approaches to maximize their online presence and revenue generation.

Benefits of Joining an Affiliate Network

Brands can reach potential clients they need help to get through traditional marketing efforts. Affiliate marketing networks enable the merchant’s products or services to be promoted online, increasing brand visibility and engaging new customers.

Affiliate marketing operates on a performance-based affiliate network, where merchants only pay affiliates for successful sales or leads. Pay-per-click affiliate networks ensure advertisers invest their marketing affiliate network budget efficiently, paying only when desired actions are achieved.

Monitoring the overall click count on affiliate links is a highly important metric. For merchants, having efficient link and click tracking software and a comprehensive lead management system is essential to attribute sales and adequately reward successful affiliates.

Phonexa’s LMS Sync provides complete lead management software that’s great for networks and brands, making sure programs are managed successfully. Advanced modeling and reporting allow you to delve into data analytics and track real-time performance.

Attaining Affiliate Network Marketing Success

Affiliate promotion is a lucrative marketing strategy to make money and boost sales for businesses, and it needs careful execution.

Selecting the best affiliate marketing platform is effective for merchants and affiliates to expand and strengthen their partnerships. Affiliate marketers can also increase their revenues.

Below, you will find general guidelines on choosing affiliate marketing networks that align with your marketing goals:

1. Reputation and track record: The first step is to investigate the credibility of specific affiliate networks in the niche. The most important thing is to check for well-established affiliate marketing networks with many successful referral partnerships. Additionally, finding network reviews and feedback from other merchants using the platform can be helpful.
2. Niche relevance: The affiliate marketing network you select must have experience and understanding of a specific niche. This ensures the affiliate platform knows your target audience well and helps you find good affiliates.
3. Affiliate base: Your chosen network’s large and diverse affiliate base gives you more opportunities to engage the target audience effectively.
4. Commission requirements: The other important step is to examine the fee structure provided by the affiliate marketing network. It must suit the affiliates and help you maintain a profit.
5. Terms and conditions: To learn more about the software affiliate network, read its terms and conditions to comprehend the policies, restrictions, and hidden fees.
6. Transparent communication: The clearer services the affiliate provider offers, the better it is for merchants, marketers, and affiliates. Transparent reporting and diverse communication channels help maintain trust in the relationship.
7. Cookies and support tools: Explore the cookie duration of the performance marketing network — the longer, the more time it takes to convert leads. As for support tools, the affiliate network must propose reporting tools, dedicated account managers, marketing resources, etc.
8. Payment process: Both affiliates and merchants must ensure the network uses dependable affiliate network tracking software to credit affiliates with no problems. Review the network’s payment terms, including minimum payout thresholds and payment methods.

Reveal Your Business Potential at Full with Professional Affiliate Marketing

Affiliate marketing remains the most famous method of promoting goods and services. Businesses of all stripes can reach great heights with the right automated affiliate marketing software, and Phonexa offers just that.

Get access to a budget-friendly solution at only $100 per month.

It includes a variety of cutting-edge products, such as:

• LMS Sync — a powerful lead management system
• Call Logic — an efficient call tracking and analytics platform
• Cloud PBX — a reliable virtual phone system
• Lynx — professional click-tracking software
• E-Delivery — an impactful email marketing instrument
• HitMetrix — unique user behavior analytics and CRO software
• Opt-Intel — an effective email suppression list management solution
• Books360 — functional accounting software with an invoice generator

Potential Obstacles Faced by Affiliate Networks

Even though the idea of affiliate networks is consistent in digital marketing, they encounter various challenges today.

The possible difficulties you need to know about:

• Fraud and compliance: Affiliate networks frequently encounter harmful actions like click fraud, lead fraud, or fake referrals. It can also be complicated to comply with advertising regulations in diverse jurisdictions.
• Attribution and tracking: It can be tricky to correctly credit conversions to affiliates, especially when there are many different marketing channels involved. You must ensure proper tracking mechanisms for fair commission distribution.
• Relationship management: To ensure loyalty, the affiliate provider must grow positive relationships with advertisers and affiliates. This involves collecting reviews, complaints, and resolving issues immediately.
• High competition: The global affiliate network is highly competitive, and certain niches may become oversaturated.
• Ad fatigue: Because people see so many ads daily, they use ad blockers more often. This can make them tired of ads, which might make even the best affiliate marketing platform less effective.
• Privacy concerns: Data security regulations like GDPR and CCPA are challenging for affiliate networks in managing user data and ensuring compliance.
• Platform evolution: The digital landscape expands, and affiliate networks must constantly adjust their platforms and technology to meet the needs of advertisers and affiliates.

Did you ever realize that affiliate network marketing can be useful in promoting things? Discover how it works in this guide on affiliate marketing.

Increase Your Earnings Through Affiliate Network Marketing

Brands and retailers cooperating with affiliate networks can discover suitable affiliates, showcase their offerings, and improve conversion and customer loyalty.

With top affiliate networks and the right affiliate marketing software, businesses can extend their reach, discover untapped opportunities, boost ROI, and improve brand awareness in highly competitive affiliate marketplaces.

Revolutionize your affiliate marketing with Phonexa’s comprehensive operating solution tailored for partner and performance marketing networks. Discover the potential of optimizing your affiliate marketing endeavors by scheduling a consultation today.

Frequently Asked Questions

What is an affiliate network?

The affiliate network definition is a powerful partnership platform connecting entrepreneurs with influencers and marketers.

It is causing rapid business growth by attracting specific visitors and increasing sales. Affiliates and merchants can maximize profits through shared success.

What is a network affiliate?

A network affiliate or affiliate partner is an individual or entity that collaborates with a merchant to promote branded services.

A network affiliate can direct traffic to the merchant’s site and receive a commission on any trade action using social media, email campaigns, and websites.

By cooperating in an affiliate network, merchants can expand their audience and greatly boost their sales. Affiliates can monetize their audience and earn substantial income.

How does an affiliate network work? 

Think of affiliate networking as a connection between sellers and affiliates. Sellers put their stuff on the network and give affiliates special links or codes.

Affiliates then use these links on their websites, blogs, social media, or emails. If someone clicks the link, goes to the seller’s site, and buys something, the affiliate gets paid a commission for making the sale happen.

What are the benefits of a good affiliate provider?

The affiliate provider or network must provide an advantageous environment for the publisher and advertisers to cooperate. The advantages of joining affiliate programs for key parties are:

• Reaching more people and getting noticed
• Earning money by making sales
• Getting into various affiliate programs
• Convenient tracking and payments

What is the difference between affiliate marketing and network marketing?

Affiliate and network marketing are performance-based, but they work differently.

In traditional affiliate marketing, people or businesses promote products or services and receive commissions when they generate sales or leads.

In contrast, network marketing, or multi-level marketing (MLM), involves participants recruiting others into the program and earning commissions from their and recruits’ sales.

Can I be both an affiliate and a merchant in the affiliate’s network?

Numerous affiliate networks welcome both individuals and businesses to become affiliates and merchants. Opting for the best affiliate networks 2023 can boost your income and help your business prosper.

If you have your product or service, you can sign up as a merchant in affiliate networks for publishers to recruit affiliates. At the same time, you may join the best affiliate networks for advertisers as an affiliate to market other products and earn commissions.

Can affiliate marketing be a dependable source of income?

If you work hard, affiliate marketing is a reliable way to increase long-term profits. As you build your audience and create trust through valuable content and genuine recommendations, your potential earnings in the affiliate network can steadily increase.

On the Internet, you will find a huge variety of affiliate networks. Hence, picking the one that suits your niche, marketing methods, and the products or services you’re promoting is important.