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Affiliate Marketing

The Cost-Effectiveness of Affiliate Marketing

Sam Saul

Sam Saul

Marketing and Account Coordinator
  • Last Updated: March 22, 2023

In This Article

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In this article

When planning your marketing budget, it is important to to understand which strategy will bring you the best possible return on investment. In this article, we will discuss how affiliate marketing can be a cost-effective solution to your marketing needs.

As marketers, one of the biggest challenges we face is ensuring we are allocating our budget to channels that have a measurable and high return for our efforts. One of the reasons this can be challenging is the wide variety of options to choose from, which are getting more expensive by the day. For many, this means an increase in spend just to retain the same return as before. This means narrowing your profit margins as cost-per-sale goes up.

When creating a strategic digital marketing plan, the number one priority is your target audience. Who are they? Where will they be? What do they do?

Once you have this information, the next step is to research channels, think of tactics to attract these customers, look at what your competitors are doing and do your best to keep ahead of all the latest trends.

Then finally comes the outputs. This means creating content, ads, emails, infographics, videos (and so much more) to send out into the ethernet and hope that all your time and money bring you a decent return.

But what about a solution that means you only pay for successful conversions with half the effort?Affiliate marketing is not new, but it is growing in popularity as more publishers are beginning to see the value in working with brands on a partnership model. Last year, according to Wordstream, Facebook ads saw an average of 1% ROI for marketers, whereas Big Commerce reported affiliate marketing can be attributed to 16% of all online sales in 2019, and the number is growing.

The difference? Affiliates are invested in promoting products because they see a direct reward from doing so. Big platforms like Facebook don’t have the same level of personal investment in your marketing success.

Pay Only for Results

Affiliate marketing is a type of marketing where you only pay for real results, meaning a meaningful action or conversion on a your site. A meaningful action can be anything from being approved for a credit card or submitting a lead for a mortgage to signing up for a free credit score product.

From a brands point of view, only paying for successful conversions means there isn’t any spend wastage. It is also less time intensive as the you are no longer the only one responsible for creating and curating new content. You’ll instead have the support of targeted affiliates with captive audiences helping to produce insightful content and exposure for their advertiser partners.

Another key benefit for brands is that affiliate marketing is very easy to track. This is an important aspect for affiliates to receive their commission. Affiliates can see what areas are performing well and where conversions are coming from. Read more on the general benefits of affiliate marketing for brands here.

Affiliate Marketing Performance

When setting up your affiliate program, you may want to consider joining an affiliate network such as Fintel Connect. Not only does this mean your program will be seen by a wide network of relevant affiliates, it also means you will be able to easily scale your partnerships by leveraging a robust tracking and reporting engine. Fintel Connect, for example, tracks consumers from the moment they begin their journey right through to the conversion point.

With this data behind you to better inform decisions, you can then more easily identify which types of partners are working well and which aren’t. We often see brands discover that certain products see strong performance in a vertical they had never considered before.

Affiliates and publishers also know their audiences intimately. They can often provide valuable consumer insight to brands on their own customers. They are also aware of changes in consumer behaviors and preferences and use this to their advantage as they are nimble and able to adapt quickly.

results of affiliate marketing 

Consumer Behaviour: What Do They Want?

Consumer behaviour has changed over the years, with consumers less likely to blindly buy products. Historically, industries were able to rely on direct and obvious forms of advertising for two reasons – 1) There were fewer products / less competition and 2) There were more ‘new’ products that came with the industrial/technology boom. However, with the rise of the internet and consumer accessibility, customers are savvier and want to know more about products before purchasing — and where the greatest value is for them.

Consumers want peer reviews, detailed descriptions of all the pros/cons of products, and for somebody that they trust to decide the best of the best for them. Brands now have to put double the effort into maintaining a positive reputation, managing customer complaints and ensuring they are seen as industry experts.

This is where affiliate marketing steps in to answer many of these challenges. Affiliates generally have a very dedicated, loyal following who trust their opinion and listen to their advice. In the case of affiliates and influencers, size isn’t everything. Sites who have smaller followings (up to about 10K visitors) often find that their audience are even more invested in what they say.

Brands are already jumping in to leverage the power of publishers and utilise their influence in the decision making process. Affiliate marketing is a neat package of more reach, trusted reviews and loyal customers available to brands at a much more efficient costing model.

online shopping 

How to Budget For Performance Marketing

The first thing to understand when creating a budget for affiliate marketing is to consider how much a new customer is worth to you and what you’re willing to pay for a new customer.

Existing digital marketing channels can be a good place to start by looking at what you are currently paying via SEM and display campaigns? For example, an easy way to find your CPA through your pay-per-click campaigns is looking at your CPC (cost per click) divided by your conversion rate. This will give you an idea of what you can afford to spare on each new acquisition.

Once you have this margin, you have your cost-per-action (CPA). This is the commission affiliates will earn for each conversion they generate. If you are clever about this, you won’t need to have budget set aside as the acquisition itself will pay for the marketing costs accrued. However, we do recommend that you set aside some budget for the initial set-up and general maintenance of the program.

The Cons

Affiliate marketing can be easy to start with the right foundation and support. However, a potential consideration to make is that results don’t happen over night. With this type of marketing channel, performance can take a little while to start picking up, as it takes time for affiliates to join, produce their content and start generating results. We typically recommend giving the channel between three to six months to really pick up. That being said, when an affiliate program has found its feet, the rewards for both publisher and merchant are far greater than other marketing efforts.

Next Steps

Marketing is always evolving and as marketers, it is our jobs to stay abreast of the trends and work ahead of the consumer curve.

With changing consumers behaviors, affiliate marketing is a nimble tactic which provides a cost-effective solution for brands looking for sustainable, long-term results.

If you’re interested in learning more about launching an affiliate program and working with leading publishers in the financial services space, we are happy to help and welcome you to reach out to our team at or at the link here.

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