What Are the Benefits of Affiliate Marketing in 2024?

Nobody promotes your brand better than a happy advocate. That’s affiliate marketing in a nutshell. 

For companies, it’s like having a team of enthusiasts doing your marketing for you. For affiliates, it’s a chance to make money promoting products you genuinely like and use. Businesses get valuable customers, affiliates get a reward for referring them, and everybody wins.

It comes as no surprise that the affiliate marketing industry is now bigger than ever before, so let’s see what all the hype is about. We’ll break down the advantages and disadvantages for businesses and affiliate marketers alike, explain how it all works and we’ll take you through how referral software makes managing an affiliate program as easy as pie!

What are the Main Advantages of Affiliate Marketing for Companies?

The low-cost, high-reward nature of affiliate marketing is a major advantage, making it a no brainer for small businesses.

Affiliate marketing is a pretty huge industry, worth over $17 billion today and expected to reach $27.78 billion by 2027. The average return on investment of brands working with affiliates is $15 for each dollar spent, which if you’re keeping up means a 1400% return. 

It’s not only small businesses running affiliate programs; major brands get up to 25% of their online sales from affiliate marketing. It’s an open buffet for everyone, and the portions are huge.

Things are looking good on the other end of the deal, too. Your average affiliate earns $8,038 a month, with the highest earners using 3.03 networks on average. It’s also worth mentioning that affiliate marketing links get over 5 billion clicks a year. 

Pros and Cons of Affiliate Marketing

We can talk about the many pros of affiliate marketing all day, but let’s spare the TED Talk and go over the most important ones—and a few cons to balance things out.

Pros

People Trust People

What’s so special about affiliate marketing is the quality of leads you get through your affiliates. People trust people, and they’re more likely to listen to someone they follow than some random ad on the internet. There’s a bond between affiliate marketers and their audience—a level of trust that traditional marketing just can’t reach. The recommendation simply feels more personal coming from a favorite blogger or influencer. What happens here is that you get leads that are already warmed up. There’s no reason to rely on cold outreach when there’s a whole bunch of potential customers already on board with what you’re selling.

Totally Risk-Free

With affiliate marketing, you don’t need to pay anything until you actually get results, like a sale or a qualified lead. This makes it a low-risk option for promoting your brand. Basically, you’re only investing in tangible outcomes instead of paying for clicks or impressions that may or may not convert. And since there’s no financial risk to worry about, affiliate marketing is perfect for startups or small businesses that can’t afford to spend too much money on marketing. It’s a win-win situation for everyone: you get a referral (a guaranteed return on investment), and your affiliates get their cut for bringing in customers for you.

Flexible Payments

Another great thing about affiliate marketing is that you get to choose how you want to pay your affiliates. It can be based on clicks, leads, or sales. This way, you can come up with a payment model that serves your goals. Let’s say you want to focus on raising brand awareness. In this case, you can pay for clicks because you just want people to get familiar with your business, but if you’re looking for conversions, you can base your payments on actual sales. You can even decide whether to pay a commission or a flat referral fee. 

Cons of Affiliate Marketing

Depends on Affiliates

One problem with affiliate marketing is that you’ll be depending on your partners to promote your products. And since affiliate marketers are basically independent contractors, they get to choose which companies they want to promote—including your competitors. And who’s to say they won’t switch to a competitor if the commissions or bonuses are better on the other side? Even if you find a great affiliate, there’s no guarantee they’ll stick around unless you offer good incentives. In other words, you’ll need to work to keep your top-performing partners on board. 

Can Take Time

Managing an affiliate program is not exactly a walk in the park. Let’s not forget that you’ll be spending a lot of time vetting, monitoring, and keeping in touch with your affiliates. Good affiliate or referral software can make this easier, especially if they come with some kind of affiliate network or marketplace; you’ll have a pool of pre-vetted affiliates that you can work with. But you’ll still need to onboard new partners, track their performance, and provide resources to keep things going.  

Why Affiliate Marketing?

There’s been a recent trend of articles and blog posts claiming that affiliate marketing is dead, but this is clearly false. 

We can’t ignore the fact that online shopping has reached new heights, creating the perfect environment for affiliate marketing to really thrive. Today, affiliates have more touchpoints to reach customers across different platforms like social media or niche websites. What this means for you is that you can expand your target audience, boost visibility, and drive conversions in ways that are just not possible with traditional marketing.

Speaking of traditional marketing, remember how we used to rely on display ads or cold calling? The upfront costs were through the roof. Don’t get us wrong; these methods are still around, but they’re nowhere near as effective as affiliate marketing programs. There is no competition. With all those bloggers and influencers out there just waiting to collaborate, the door is wide open.

How Referral Factory Can Help You Start Affiliate Marketing

At this point, you know what to expect from affiliate marketing and what it can do for your brand. You might even be looking to create an affiliate program of your own (we have that effect on people). Referral Factory has everything you need to get your affiliate program on its feet. It’s a plug-and-play software made by marketers for marketers that lets you launch affiliate, influencer and even customer referral programs on brand for a fraction of the cost of hiring an affiliate marketing agency.  

Once you’re up and running, there are built-in tracking tools you can use to keep up with the data. You can even pass data between Referral Factory and your CRM or payment processor. Referral Factory can also automatically reward top affiliates for successful conversions that you set and offer perks to the new leads those affiliates bring in, making the entire process fully automated. 

One thing’s clear: affiliate marketing is here to stay. There’s no denying its potential if done right. Use Referral Factory to build and manage an affiliate program that actually works. Watch this short video to see exactly how it works.

Frequently Asked Questions

What are the advantages of an affiliate marketing strategy?

Affiliate marketing is a cost-effective way for brands to increase sales by paying affiliates only for results. Affiliates promote products to audiences they know well, which means more targeted leads and less money spent on ads. This strategy lets brands scale with lower risk and reach new, engaged audiences.

Why is affiliate marketing so effective?

Affiliate marketing works because it’s built on trust. When affiliates recommend a product, their audience tends to listen, turning suggestions into purchases. This credibility factor is what drives higher conversion rates, as people are more likely to buy based on trusted endorsements.

Is affiliate marketing good money?

Affiliate marketing can be lucrative, especially for those with a loyal, engaged following. Income depends on the niche and audience, but successful affiliates can make consistent passive income, making it a popular option for creators looking to monetize their content.

What are the benefits of affiliation?

Affiliation allows brands to grow by leveraging personal recommendations, while affiliates earn commissions for their efforts. It’s a flexible, performance-based model that expands brand reach and rewards both parties, creating a sustainable growth path without big upfront costs.