Quick Answer: Advertising is simply any type of marketing for products and services online or offline. Affiliate marketing is a form of online advertising where affiliates earn commissions on sales.
The main difference between these two concepts is that with affiliate marketing, you are not paid for displaying an ad, as you would be for a banner ad on your website, but rather for bringing in customers and establishing repeat business.
With conventional advertising, there is no need to worry about the % of sales generated; you will get paid for Click Through Rate (CRT) or the number of ad clicks.
Comparison Between Advertising & Affiliate Marketing
Advertising deals with the visual impact on the decision-making of potential customers and ad viewers. The focus is on creating intriguing advertisements that viewers cannot resist checking out.
Affiliate marketing focuses on tactics to convince potential customers, i.e., your followers or reader, to buy a product or service.
Affiliates may or may not use direct calls to action (CTA). Sometimes, they review or compare a product with competitors with a hint of indirect recommendation. They have to do it since their profit relies on the number of sales. Sending your traffic to the merchant’s site is half of the task.
Affiliate marketing involves promoting goods and services online through blogs and social media. The marketer gets a commission on any sales generated from their efforts.
Advertising typically involves more traditional forms of media like television, radio, print ads and billboards. Businesses pay a fee to have their product or service advertised through these mediums with the hope that more people will buy their products or service as a result.
If someone clicks on that ad and buys something from your website, the advertiser will pay you based on how many people saw your ad.
With traditional advertising, you’re paying for ad inventory. That means that the publisher has to display your ad space, which is typically measured in impressions (views) or clicks. If someone clicks on your ad, you pay for that click regardless of whether or not it resulted in a sale.
With affiliate marketing, you are paying for performance. This means that an affiliate marketer only gets paid when a customer clicks through an affiliate link and makes a purchase.
Affiliate marketers place ads on their own blogs or websites, but advertisers usually place ads in high-traffic platforms on well-trafficked websites like Yahoo! News, MSN News, MSN Sports, MSN Entertainment, TMZ and more.
Value For Merchant
Affiliate marketing seems a fair budget-friendly marketing strategy for merchants. They only pay for the sales generated by affiliates. It does not hurt the merchant since nothing is going out of the existing funds.
Advertising requires more budget and you have to pay for pulling in traffic from different sources regardless of the sales generated by this traffic.
The merchant has to allocate funds from the existing budget. But it does not mean that advertising is shrinking the merchant’s funds. The reason is that advertising pulls in considerable traffic – much more than the affiliates can do.
Advertising is a tried and tested sales booster. However, you have to allocate the budget first, invest it and then make a profit on it. However, for small companies with limited budgets, launching an affiliate program is less risky.
Transparency is important in both cases but more responsibility sits on affiliates’ shoulders. Advertisers work closely with the company’s marketing team and are careful about consulting the merchant before approving an advertisement.
On the other hand, affiliates are closely linked to their followers, readers, and subscribers.
Sometimes they get carried away while using convincing tactics and commit mistakes. Intentional or unintentional misleading claims might generate a few quick sales but will surely hurt the fan base in the long run.
In the textbook, advertising and affiliate marketing must be transparent and honest but reality always deviates a little from the textbook rules.
Both provide different information. An advertiser might provide facts and features, an affiliate can provide additional, more emotional information such as personal product reviews or customer testimonials.
The last main difference between advertising and affiliate marketing is that with advertising, it’s usually harder to make connections with the people who are buying your stuff. With affiliate marketing, there’s a better chance that they’re the people you want them to be.
Affiliate marketing provides a direct relationship between seller and customer which is missing in advertising. So customers can directly get up-to-date information about the product from affiliates rather than from the company’s website.
Advertising vs. Affiliate Marketing: The Bottom Line
Affiliate marketing and advertising are two different approaches to promoting products.
A successful affiliate marketer creates an online presence, usually a blog or website, on which they promote their merchant’s products or services.
A traditional advertiser puts a banner ad up on a blog or website to direct visitors to their site, where they can purchase the product or service being advertised.