What is an affiliate programme about?

An affiliate programme is an advertising model by which the company rewards its partners (affiliates) for actively recruiting new clients. It helps the company to reduce advertising costs while giving partners an income for every referred client, and/or an effective target achieved.

How does an Affiliate programme work?

  1. A party interested in collaborating with the company registers in the programme and becomes an Affiliate.
  2. The partner (Affiliate) receives a personal link with a unique code which leads to the company’s website.
  3. The Affiliate attracts clients for the company via their own distribution and communication channels.
  4. Clients follow the affiliate link to the company’s website and buy the services.
  5. The company pays a commission to the Affiliate.

Example of an Affiliate programme

This form of partnership became especially popular in 1996 when Amazon.com Inc. (NASDAQ: AMZN) launched its own affiliate marketing programme.

After registering, members of Amazon’s affiliate programme who owned online resources received special links. They could then promote Amazon’s products by posting about these with relevant links on their own site.

Visitors to the affiliates’ websites who were interested in those Amazon’s products, could then follow the links provided by the affiliate to the Amazon marketplace. If clients bought something on Amazon, the affiliates would then receive a percentage of that sale from Jeff Bezos as a commission.

Forex Affiliate programme

Similar partnership offers exist in the Forex market: brokers pay Affiliates commissions for attracting new clients to their trading platform.

Anyone can become an Affiliate: this programme is often open to webmasters and website owners, marketers and traders who use their own resources, social networks, personal communication, as well as online and offline advertising to recruit clients.

As a rule, an Affiliate receives a commission for every successful trade of the client they have attracted. An Affiliate can also generate additional income by attracting new affiliates who, in their turn, will bring in new clients to the broker.

A Forex Affiliate programme can be a profitable form of cooperation both for a broker and a partner. The broker gets new clients who actively use the trading platform and the Affiliate gets additional profit for promoting a well-known and tested product.

Types of Affiliate programmes

The main criterion for classifying affiliate programmes is what actions will attract clients and for what a partner will receive a reward:

  • CPA (Cost per Action) – the Affiliate receives a one-time reward, the amount of which is determined in advance, in case clients perform specific actions, for example, depositing into their trading account.
  • CPC (Cost per Click) – the Affiliate receives a commission for the number of clicks made by clients through the affiliate link they provided. Whether the goods or services by the link were bought or not is irrelevant.
  • CPL (Cost per Lead) – the Affiliate is rewarded for registering clients. Whether these new clients will be using the services of the company in the future and how often is irrelevant.
  • Revenue share – the company shares the profit made on attracted clients with the Affiliate. The more active the newly attracted clients are – the more services they use – the higher the reward amount to the Affiliate.

Advantages and drawbacks of Affiliate programmes

Advantages:

  • Easy start – you just need to register in an affiliate programme to get started
  • Minimal risks – there is no need to sell or buy anything, the main goal is to attract clients through promotion
  • Passive income – the target goals of attracted clients, even the first ones, can generate income

Disadvantages:

  • Fierce competition – because Affiliate programmes are profitable, there are a large number of participants who want to earn money by attracting clients
  • Required experience – having knowledge of marketing can accelerate the achievement of an affiliate’s goals
  • Unstable revenue – the sum of an affiliate’s income depends on the number of attracted clients and their activity
  • Time-consuming process – finding and attracting clients is not a quick process