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Busting Affiliate Marketing Myths for Merchants

Last Modified: January 31, 2023

affiliate marketing myths

There is a lot of misinformation out there about what affiliate marketing can or can’t do on the merchant side. We’re here to dispel them because these myths can be a barrier to entry for many SMBs looking to start up an affiliate program. They’ve heard from some other business that had one bad experience and now they are reluctant to give it a shot themselves. It happens all the time, and it’s an easy way to leave money on the table.

Here are 6 affiliate marketing myths you shouldn’t believe.

Affiliate marketing is too old school.

Yes, the concept of referral and affiliate marketing has been around as long as there have been wares to sell, but there’s a reason for that: it works. Everyone wants a trusted review before buying, and besides friends and family, people seek online reviews and the suggestions of social influencers. According to AdWeek, 92% of consumers believe that the recommendations of influencers are more authentic than ads.

Affiliate marketing isn’t obsolete. Far from it. We live in an age where:

Currently, reports show that affiliate marketing affects 14% of all ecommerce purchases in the US, and that percentage grows each year, and 91% of merchants who currently use affiliate marketing plan to increase or maintain their spend levels. Far from being “old school,” we think affiliate marketing is just about to hit its stride.

Affiliate marketing is full of fraud and shady practices.

fraud and shady practices

Like anything else in the world of business, people can and will abuse the system. We’ve written about how to protect yourself from fraud before. It happens, and it’s important to be diligent about checking your metrics and nipping fraud in the bud.

However, merchants who have heard horror stories about affiliate fraud should calm themselves down; it’s just not nearly as bad as you think. While it’s hard to get definitive numbers, one source put the percentage of fraud from all performance-driven transactions at 2%. Compare that to Forrester finding that as much as “56% of all display ad dollars were lost to fraudulent or unviewable inventory in 2016.” Even if you quadruple the amount of fraud in affiliate marketing, it’s still far below the amount of fraud in other ad channels.

Also, however much fraud there is in affiliate marketing, much of that comes from joining an existing affiliate network. For example, this paper in the Journal of Cybersecurity found that 38.1% of Amazon’s affiliate partners were engaging in fraud. If you start your own affiliate program in-house, you won’t see nearly that much fraudulent activity. After all, you’ll control exactly who you work with, directly.

Affiliate marketing won’t work for XYZ niche.

We hear this from time to time. Either the business “tried it once, didn’t work” or “people in the space said it doesn’t work.” But if you really dive into their experience, it rarely holds water.

To be fair, there are absolutely reasons a well thought-out and executed affiliate marketing campaign can fail. Competition can be fierce in popular verticals. A small business might not be able to offer competitive commission rates to find affiliates.

But most companies that pooh-pooh affiliate marketing a) never tried it themselves, or b) never gave it much of a shot. After all, another quick myth to dispel is that affiliate marketing is set-it-and-forget-it. Thinking that way quickly leads to failure. Like any other aspect of marketing, time and effort are needed to make it grow, and there are addressable reasons why it’s not working for a business.

If you research any business category, you’ll inevitably see a business running a successful affiliate marketing campaign within it. In fact, we’ll make a bet with you: tell us a niche that no company performs affiliate marketing in and if you’re right, we’ll give you a $25 gift certificate to Amazon. If you’re wrong, you give us the $25. Deal?

It’s a great way to outsource content creation.

affiliate marketing myths

While tackling the overall myth of “affiliate marketing is easy!” is a waste of time (at this point, companies avoid doing it because it’s not easy), there is one aspect of this that actively prevents businesses from succeeding at it: namely, thinking that it’s up to the affiliates to create all the content for you.

Yes, aspects of this type of marketing rely on your reps to write blog posts, reviews, create YouTube videos, and social media posts about your brand and products. But solely relying on them to create unique content each and every week is unrealistic, especially since they don’t make commission off content; they make commissions off a sale.

Providing content that they can “remix” and repurpose will be a giant assist to their overall productivity when it comes to marketing your business. For example, include a bunch of images of a new product that affiliates can use in your monthly affiliate newsletter. Make sure they are PNGs with the background removed, so they can easily Photoshop them for their own use. Or write up a comprehensive summary of your new service, hitting all the important bullet points. You’ll quickly see that doing the heavy lifting in terms of generating content will have a positive ripple effect across all your reps.

The bigger the influencer, the bigger the ROI.

We can’t all work with the Kendall Jenners of the world to hawk our wares, but that doesn’t mean merchants should skip looking for smaller influencers to work with. In fact, they can be even better to partner with.

The most famous influencers are expensive. It’s not unheard of for brands to pay them $50,000 to $250,000 for a single post. Most SMBs can’t afford that, nor should they want to dilute their brand by working with just a general “celebrity.” Brand trust isn’t earned that way; rather, working with a known expert influencer in your niche will confer much more trust.

Micro-influencers (those with 2,ooo to 10,000 followers, though that goal post is always moving up) are celebrities only in their niche, and that’s perfect for your needs. Plus, they’re affordable to work with, meaning you’ll get a much higher return on investment. And according to Marketly, micro-influencers have a higher level of engagement than the bigger fish, adding to their bang for the buck.

instagram comment rate

This dove-tails nicely into our final myth…

It’s how many affiliates you have that really matter.

If you ask most businesses, they seem to ostensibly know that quality is greater than quantity. But in practice, you’ll see them scramble to sign up every single warm body they can into their affiliate marketing program. So ask yourself: what’s your rejection rate? Do you have one at all?

If you do it right, each affiliate takes some time and resources. Working with a dedicated, well-managed staff of a handful of reps can make much more sense for an SMB with limited time, than trying to manage hundreds or thousands of brand reps. That’s how you get fraud. That’s how you get low-quality content that lives (forever) on the internet. And that’s how you burn out.

Let’s do some math (sorry).

You have two affiliates at a 15% commission with the average product price of $100. Affiliate A is great, and returns 3 sales a month. That’s 36 a year; $3600 in revenue and $540 in commission.

Affiliate B is lazy. Say 5 sales the entire year. $500 in revenue, $75 in commission.

Here’s what you should consider doing in this scenario: cut ties with Affiliate B and allocate that extra $75 you would have paid in commission to bumping up the commission rate of Affiliate A.

At 18% commission, you’d pay out $648 instead of $540. That $108 difference is mostly offset by the $75 you’d spend anyway (on Affiliate B). But the kicker is that you’ve just given Affiliate A a 3% raise. That’s motivation to work harder and convert more sales; motivation to an already excellent seller. Now this person is returning 4 sales a month, 48 a year. $4800 in revenue, $864 in commission. It’s win-win. And considering you’re working with one less affiliate and saving time/energy, it’s win-win-win.

What myths about affiliate marketing do you want us to dispel? Let us know!

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Written by

Ruthie Carey
Ruthie Carey