Am I an affiliate or partner of a company? Is there any difference between the two?
Yes, these terms may be a little bit confusing. They are just words. Everyone says “affiliate” anyway. No one cares. Those who care should overcome it, right?
The truth is affiliate and partnership marketing are two different things.
We cannot deny that early coupon sites and shady players negatively portrayed the word affiliate, and that’s why many people simply don’t want to be called an ‘affiliate’ anymore.
Indeed, the differences between the two go beyond the literal meaning.
For example, one is judged by the size of the program network; others by the network quality.
One is the need for continuous recruitment and onboarding to obtain long-tail income; the other is the continuous generation of ideas, content, and strategies to promote loyal income. One tends to focus on deals and coupons; the other on brand value.
One requires participants to join their network through a large number of emails; the other engages their extended team through personal and group conversations.
One is owned by the network; the other is directly owned by the brand with the workflow being managed by the platform.
One is about repeatable processes; the other is about interpersonal relationships.
The above mentioned is what we will evaluate in this post when comparing affiliate and partnership marketing.
Remember no matter which term is used, it’s all about mutually beneficial cooperation between two parties.
It’s either between companies and individual marketers, or sometimes between two companies.
For more information, read more about Exabytes Affiliate Starter Guide today.
Characteristics of Affiliate and Partnership Marketing
If we agree on what affiliate and partnership marketing have in common, then this relationship is likely to be monetized through performance-based commissions from the merchant to the partner/affiliate.
When we talk about affiliate marketing, we are mainly referring to a commission model in which affiliate marketers get paid through conversion.
In a broader sense, affiliate marketing can also cover other CPA (Cost per action)-based partnerships, in which businesses pay for other actions, not just conversions.
Cost per action (CPA) refers to when a specific action is completed, the company pays a commission to the affiliate. For instance, these actions can include registering a free account, filling out forms, bringing in potential customers, or simply watching videos.
On the other hand, partnership marketing may involve commissions that are not performance-based. For instance, influencers charge a fixed fee for brands to create social media campaigns or promotional articles.
Influencers get paid, but the results are not guaranteed. This type of collaboration still belongs to the partnership marketing category.
We can define partnership marketing as a broader category of business cooperation.
This includes affiliate marketing, influencer marketing, cross-selling, co-promotion and co-creation, event sponsorship, licensing agreements, distribution partnerships, etc.
In short, the affiliate is a subcategory of partnership marketing. It can be further divided into different sub-types, such as content, PPC (pay-per-click), email, and social media-based affiliate marketing.
Then what is referral marketing?
Referral marketing is mostly related to affiliate and partnership marketing. This is like a light version of affiliate marketing, usually in the form of word-of-mouth marketing.
It is mainly limited to company customers who recommend products to friends, family, and acquaintances.
Therefore, the main difference is the relationship that exists between the recommender and the recommended person.
In affiliate marketing, there is no need for any relationship between the two parties. In referral marketing, a customer rarely brings more than a few referrals.
On a smaller scale, we don’t necessarily talk about partnerships in this sense. Although referral marketing can be confused with the broader category of partnership marketing.
Coupons and Cashback Sites – Affiliate or Partners?
Coupons and cashback sites are part of the reason for the damage to the reputation of the alliance industry. Together with the “Get Rich Quick” program, they added a negative connotation to the term “affiliate.”
Some marketers may be referred to as affiliates and choose not to join any such programs.
Now, what if all the conditions remain the same but the merchant decides to call it a partner program? Are those who are excluded from anything related to affiliation more likely to join? Well, some merchants have already tried it.
But the use of coupons, cash back, and other improper behavior also seems to have begun to decrease. Many brands don’t like to use them at all. For example, those who offer coupons usually prohibit the use of coupon keywords online.
This of course means that they will not work with coupon sites that rely on these keywords.
The only value coupons and cashback sites that contribute to the channel are to provide discounts or cashback to end customers. They are strictly speaking of revenue sharing, without adding any real value to the channel.
Coupon and cashback sites can be combined with price comparison sites and are considered a subcategory of affiliate marketing. As the most obvious group of last click contributors, they are different from partners who can sit almost anywhere in the funnel.
Bloggers and Influencers – Affiliate or Partner?
Many content affiliates that promote affiliate products on their blog or social media are also micro or nano influencers. Even consultants and analysts who use a certain product and recommend it to their network can be considered influencers.
We call them affiliates because they must join an affiliate program or network to get paid for their referrals.
On the other hand, influencers with higher numbers of followers and traffic can also get paid through other partnership agreements. For example, a popular influencer can sell link locations or product reviews to brands.
In these agreements, there is usually no guarantee. Brands are willing to pay a lump sum for exposure and popularity. This is ideal for influencers because it has guaranteed money and is much easier than driving actual sales.
So, can we distinguish between bloggers who get paid only through conversion and influencers who sign other non-performance-based cooperation agreements? Not so, because influencers also promote offers by paying for conversions.
Moreover, the distinction between influencers, bloggers, niche experts, and key opinion leaders is not even clear. They can all participate in affiliate programs and other partnerships at the same time.
Building partnerships with influencers or niche experts is a better long-term strategy for brands that are not just looking for quick wins.
Although it seems reasonable to describe such affiliates as partners, it is a bit far-fetched to imagine a company like Amazon or Booking.com establishing a relationship with any of its individual affiliates.
Publishers and Advertisers – Affiliate or Partner?
If you are familiar with the affiliate marketing industry, you will definitely come across the terms publisher and advertiser. Advertisers are usually brands that pay to display their advertisements on different platforms and websites.
Publishers are people who display these ads on their website or platform and get paid for certain actions such as conversions or clicks. CPA or CPC networks usually operate between the two and charge commissions to connect them.
Therefore, the use of these terms is more restricted. Generally, you can hear the terms publisher and affiliate used interchangeably. Although most affiliates are not involved in display advertising, they are not actually publishers.
Most affiliate marketing programs have a diversified foundation of affiliate marketing, and they use multiple channels to drive sales. Limiting it to a publisher-advertiser relationship does not seem appropriate.
In other words, publishers should be considered affiliate subcategories, which in turn are partner subcategories.
In a Nutshell
Due to the obvious overlap between affiliate categories and channels, perhaps the terms affiliate and partnership marketing should not be considered separately at all.
For example, influencers may receive non-performance-based payments, but they also use affiliate links to pay them conversion commissions. Just like any other subsidiary company.
The commission model only reflects the value of the partner to the brand. It is up to the company to determine how to measure and reward the performance of the partner. Whether we call them affiliates or partners, it makes no difference in the end.
Third-party referrals are a powerful marketing channel to promote sales and brand awareness. No matter what terminology we use, the industry will remain vigorous.
If you want to learn the basics of affiliate marketing, check out our ultimate guide. Join our affiliate program to earn up to SGD100 commissions from each sale!