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2 Radically Different, yet Profitable Approaches to Affiliate Marketing

If you’ve been a regular reader of this blog, you’d probably know that I’m a believer in business systems. And affiliate marketing lends itself to a systems-based approach easily.

Most affiliate marketers will follow one of two systems, or in some cases a hybrid of both systems.

[For the course of this post, I'll loosely use 'affiliate marketing' (which involves a transaction) to also include CPA (cost per action) or lead generation-based marketing (which may or may not result in a transaction)]
A systems-based approach provides an easy way to:

  • Design and plan an affiliate marketing campaign
  • Objectively test, implement and measure your results
  • Tweak your system to achieve an optimal result on your time and resources

Having said that, most affiliate marketers will adopt the first approach:

  • Product-based Affiliate Marketing

In this approach, you’d determine the class of affiliate marketing products you’d be marketing, for example, cell phone ringtones, or holiday vacations.

Based on the characteristics of the product, such as payout, geographical eligibility, etc, you’d determine the demographic for the product and then create multiple campaigns.

Perhaps teenagers, working professionals, retirees for your offer.

As you cast the net wider, you’d see a corresponding increase in your results.

While the product-centered approach works well and is used by the majority of affiliate marketers (maybe in excess of 80%), I prefer the second approach:

  • Profile-based Affiliate Marketing

In this system, I’d identify a specific demographic, for example, homemakers.

From there I’d identify their demographic, interests, hobbies and buying patterns.

We’d know that homemakers would spend quite a bit of time at home, so something home-based would be ideal. Perhaps work from home business opportunities?

They’d also have hobbies which are fairly geo-specific, or related to the home. Perhaps items like scrapbooking, quilting, cooking. There’re a number of products with affiliate programs which fit within this category.

Also, looking at census information, a large proportion of homemakers will have 2 or more children at home. So educational items and toys would fit this demographic too.

Once you’ve created a psychological profile and have an understanding of your consumers, you can create a portal for your demographic, in this case, homemakers.

A caveat, there is a large amount of effort required to engage in this holistic marketing exercise, compared to just promoting a single product with the product-based approach.

However, when you view this situation in context, that you could see multiple transactions, maybe in the region of 3-5 purchases per consumer, compared to just a single transaction with the product approach. There is greater ROI on your time.

And developing a profile-based approach may take twice the amount of time as a product-centered one, yet deliver 200-400% greater results.

You will also have the benefit of building a community which also generates its own buzz marketing.

In that context, sophisticated affiliate marketers will look at developing communities themed around a profile or demographic, rather than merely a single product.

4 comments on 2 Radically Different, yet Profitable Approaches to Affiliate Marketing

  1. Leonard
    January 31, 2007 at 8:15 pm (4868 days ago)

    Which is precisely why it has been emphasized time and again, that it’s imperative to work within a specific niche for maximum ROI, than to target the entire market.

    Though I would prefer to label it as needs-based marketing.

    Ask what your list want and give it to them.

    By the way, good to see you back.

  2. Geordie
    February 1, 2007 at 7:05 am (4868 days ago)

    Great Post Andrew…As always, a mix of both approaches spreads your profit base, which is nice if things go upside down from time to time:)

  3. Andrew Wee
    February 1, 2007 at 9:04 pm (4867 days ago)

    Leonard,
    I’d blogged about needs-based marketing previously.

    Though needs can be interpreted as being from a product/service standpoint, or from the consumer standpoint.

    With adopting a product or demographic perspective, it dichotomizes the issue so it’s transparent and leaves no room for misinterpretation.

  4. Andrew Wee
    February 1, 2007 at 9:06 pm (4867 days ago)

    Hi Geordie,
    Diversification is always good…provided you have ample resources.

    For newer affiliate marketers, or when entering a new space, I think the profile-based approach provides more leverage given limited resources. It has a longer tail, compared to a one-off product-focused transaction.

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