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Why Affiliate Marketing Yields Better ROI Vs Google

If a customer returns a product, you don’t have to pay the affiliate anything however with Google, you still have to pay

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“Half the money I spend on advertising is wasted; the trouble is, I don't know which half.” - John Wanamaker


The conundrum holds true for modern marketing as well and is exactly where Affiliate Marketing comes in. A stark contrast to traditional Offline & Online Marketing channels, affiliate marketing offers an unparalleled return on investment.

Before we dive into numbers, let’s revisit the basic idea of Affiliate Marketing. Here, a third party i.e. an affiliate, uses various forms of marketing like Email, SMS and Notifications to promote your product or service. The affiliate gets paid only if a sale is made. Hence this kind of marketing is also called Performance Marketing.

On Google Ads however, a marketer pays Google per click. Let’s take an example to show the sheer cost difference between Google and Affiliate Marketing. In Fashion, the typical affiliate fee is 10%. So if an affiliate drives a sale for Rs 1500, the cost is Rs 150. On Google, the average Cost Per Click is Rs 10 and average conversion rate is 1%. Therefore, on Google, the cost per sale works out to Rs 1000.

Below is a quick Google vs Affiliate comparison for other categories. 



Moreover, if a customer returns a product, you don’t have to pay the affiliate anything however with Google, you still have to pay. 

The next argument some marketers have is around new vs old users. Yes, affiliates might not always drive new customers, but then neither does Google. Marketers show Google Ads to new and old users alike and pay huge costs per sale. Here too affiliate marketing wins on purely ROI.

The main Ecommerce affiliates in India include: 

  1. Cashback & Coupon Sites
  2. Price Comparison Sites
  3. Banks
  4. Telcos
  5. Newspapers


Between the 5 top affiliates, just about every eCommerce user in India is covered. Given the sheer economics, Marketers in India must look at Affiliate Marketing more seriously. 

It is therefore no surprise that the biggest players like Amazon, Alibaba, Booking.com, Expedia, Tesco are all investing resources to grow Affiliate Marketing.

Affiliate marketing is a lot of things but mostly it is smart business. 


Assumptions

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Rohan Bhargava

Rohan Bhargava is the Co-founder of CashKaro.com, Indian Cashback & Coupons site. He is an alumnus of the London School of Economics and is also a qualified CFA. Rohan has worked in London at Aladdin Capital, a large US-based hedge fund and at an asset management fund, Washington Square before starting his first Cashback venture - Pouring Pounds along with his wife & Co-Founder, Swati.

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