Affiliate marketing, originally starting in 1994, is a way of paying commission for referable business.  It is used by many businesses all over the world for the many advantages it has over traditional forms of advertising such as monthly banner ads or pay per click ads. 
However, saying that, affiliate marketing does have drawbacks too which limit the flexibility of this advertising method. In this article, I will go over the pros and cons of affiliate marketing.
Benefits
Affiliate Marketing is Performance Based
This is the most obvious pro to affiliate marketing. With pay per click, one of the most common negatives about the service is click fraud. I once read a statistic that said roughly 40% of adverts are click fraud. That’s huge. This is all eliminated in affiliate marketing because the only way yourself (as an advertiser) can pay the publisher is if his advert results in getting you a successful conversion. This could be from a sale to a sign up to even just to watch a YouTube video. Click fraud is non-existence because a conversion in affiliate marketing the majority of the time involves the ‘clicker’ to buy something.
Easier to Budget
Many advertisers that use affiliate marketing find that they don’t need to budget at all for their campaigns. Why? Because the commission they give to publishers come straight out of the money they make from the conversion. That may sound a bit confusing so in simple talk:
- Affiliate advert is displayed on a website and is clicked.
- The ‘clicker’ then buys the book (let’s say the advert was about buying a book) which creates an income for the advertiser.
- The advertiser then pays the publisher commission (preferably a percentage of his sale) for gaining him that sale.
You only pay out commission when money is coming in. This means affiliate can constantly be used, even if you think you can’t afford it. The only thing that will get affected will be the profit margin on your product or service.
Drawbacks
Results Vary
The results of your campaign will vary much more than pay per click programs such as Adsense. You rely that the people at the moment in time they click your advert are willing to buy your product or service. This is a reason for the inconsistency of affiliate marketing. People click on the adverts but know they won’t buy the product or service.
Results Take Time
PPC is well known for the extremely quick results it can produce (within as little as 15 minutes!). On the other hand, affiliate marketing does not achieve this speed. Affiliate marketing is a form of advertising with much longer term results. For this reason, if you want quick results, try pay per click. If you want a long term successor for advertising and you want to sell a product or service, affiliate is the way forward for you.
