Understanding Affiliate Marketing Costs: A Comprehensive Guide

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If you have a website, YouTube channel, Instagram meme page, or Facebook group, the chances are you have already thought of advertising for brands to earn money. Affiliate marketing is an excellent option here. Publishers who have traffic and are looking to monetize it can profit from getting commissions by promoting goods and services.

For qualified affiliates, it happens as a side hustle and quickly evolves into their primary source of income. Those pros who don’t have traffic to sell, prefer buying traffic and directing it to brands’ landing pages. Roughly said, we talk about classic affiliate marketing and CPA marketing. Both require financial investment. So how much do you need to invest to guarantee success?

In this article, we break down all of the potential costs of starting and running an affiliate business. Then, you’ll have a clear idea of how much money you should set aside for your affiliate marketing costs.

What are affiliate marketing costs?

To get a better idea of how much you need to spend to get started as an affiliate marketer, we’ll dive into all the affiliate marketing associated costs.

In simple terms, you are in for a four-step plan that requires investment:

1. Choose a niche to focus on,
2. Build online assets,
3. Increase web traffic,
4. Promote an affiliate offer (per affiliate marketing program).

While affiliate marketing isn’t a get-rich-quick scheme, you can use a few strategies to get started making affiliate sales sooner and cheaper. You can implement a website or landing page. You can choose a niche that isn’t too crowded, use paid ads, promote popular, high-demand items, use email marketing, and many other options.

Depending on the path you follow, here is the list of expenses that await you within your affiliate marketing budget. These are the costs for:

1. Traffic
2. Tracking tools
3. Spy tools
4. Landing page builders
5. Translating services
6. Creatives and images
7. Training
8. Outsourcing
9. Website

It all depends on your initial resources and there can be possible hidden costs. We will discuss that in detail below.

If you address Adsterra advertising network as a traffic source, you have all the tools to look after your ad campaign and spend your budget wisely. One such tool is CPA Goal that allows you to optimize CPM/CPC traffic and enhance your conversions.

Affiliate marketing costs: a full breakdown

When promoting products or services, it’s good to keep in mind how it all functions on the side of your affiliate partner. For business growth, companies employ affiliate marketing programs as a way to boost revenues and let affiliates earn as well.

Depending on the business size, companies incorporate the costs associated with creating and managing affiliate programs, including affiliate marketing software, affiliate program management tools, devoted affiliate managers, marketing materials, etc. In turn, it reflects in typical affiliate commission rate and recurring commission structure.

Here, special attention is also paid to recruiting affiliates, choosing an affiliate management platform that orchestrates all affiliate relationships, and cost-effective approaches.

Initial setup costs for affiliate marketing

Initially, you must know where to purchase traffic, for example, with a reliable ad network. Then, join a reputable affiliate network and select an affiliate offer. Different networks may have more or less strict criteria for who they accept as affiliates.

As a beginner, you may face rejections from time to time, prolonging the time it takes for you to get started. However, you can spend that time better researching the market. Have a look at the affiliate marketing guides we’ve published for you to understand what paid traffic and traffic sources involve.

The initial things you need to start your first affiliate marketing campaign are:

• an offer,
• a traffic source,
• an affiliate marketing budget for testing.

The amount of money you need is determined by the offer or affiliate marketing program you choose. As a beginner, you should avoid offers with high affiliate marketing commission rates, which may appear appealing due to the profit potential but are extremely difficult to optimize for profitability. Offers with high payouts require experience and large budgets, so keep such affiliate marketing programs for later.

Affiliate marketing verticals: from the cheapest to the most expensive

Your initial testing budget is determined by your chosen vertical, the types of affiliate program offers, and the competition. The lower the offer’s payout, the more likely you are to get conversions.

Simple, low-payout offers also don’t need expensive traffic to produce results, unlike higher commission affiliate programs. With a small budget and a single campaign, you can make profits quickly.

Tier limits aren’t always accurate, for example, Sweepstakes offers can be scaled from low to high budgets with high earning potential. In addition, when compared to campaigns in Tier 1 countries, antivirus mobile campaigns run in Tier 3 GEOs can be quite affordable.

Here’s how we can generally categorize affiliate marketing verticals. With this set structure in mind, you can approach an ad network, like Adsterra, to buy quality traffic:

Lower entry barrier and simpler conversions:

• Sweepstakes,
• Mobile Downloads,
• Utility.

Here is a real-life story of our Partner who gets 57% ROI on Utility and a mix of Social Bar and Popunder with impressive results. The success had to come about by making sure the product functioned well, leveraging quality traffic on Adsterra, and choosing effective creatives.

Medium entry barrier and tougher conversions:

• Education,
• Dating,
• Travel,
• Streaming,
• Lead generation,
• Antivirus,
• VPN.

Higher entry barrier and difficult conversions:

• iGaming
• Digital currency,
• Gaming,
• Finance,
• Diet & Nutra,
• and the E-commerce niche in affiliate marketing.

How much does it cost to start affiliate marketing?

To get started as an affiliate, you’ll need a budget of around $500. Remember that some of the tools you use are paid every month, so you’ll have to reinvest a portion of your earnings every month. The following is a breakdown of the expenses:

Investments in traffic

When you have massive organic traffic and plan to monetize it with classic affiliate marketing, you won’t normally spend any money. However, if you’re a CPA marketer or prefer creating landing pages to drive paid traffic, then you will have to become a wizard of budgeting. Generally, $300 is enough to run a few tests and earn some money. Your first campaign should aim at Tier-3 customers (GEOs).

What is a traffic tier?

Advertisers typically use “Tiers,” which are groups of GEOs (geographical locations) based on the purchasing power of customers in that region:

• Tier 1 — GEO set with the most active buyers, including expensive goods. Also, these are the most technologically advanced countries, with fast Internet coverage and online payments. They are also the most competitive GEOs for offers and ads;
• Tier 2 — GEOs that are less competitive and have an average purchasing power, less likely to buy;
• Tier 3 — GEOs that primarily include developing countries where 4G/LTE is being massively introduced, but buyers are not so active yet.

Also, choose an offer with a simple conversion flow (i.e., one that does not require deposits or credit card submissions) and, of course, a transparent commission structure.

How to test a CPA offer?

To test an affiliate offer from affiliate networks (including traffic, creatives, and landing pages), you can check out our article on testing CPA offers. If you’re unsure about the appropriate vertical, Surveys and Sweepstakes are the low-cost, simple-to-run, and ideal verticals to kick-start.

The recommended testing period is usually 3-5 days, and the optimal daily budget for testing is $100. For most low-payout affiliate program offers, a marketing budget of that size should be enough.

Tracking tools

You can track the performance of your ads with the built-in statistics dashboard when you buy Adsterra traffic. For more details, please consult our guide Powerful Updates of the Adsterra Statistics for Advertisers.

You can invest in a separate tracker for more flexibility, which usually costs $100 per month.  And Adsterra will also come to the rescue here! All our advertisers get exclusive discounts and promo codes for top tracking systems. Don’t Miss Red-Hot Adsterra Bonuses and Freebies [by Top Partners].

Spy tools

These tools can help you identify high-performing competitors, so you know what ad you’ll need to create. These apps or websites often begin at $40 and include several features such as keyword research and search results page analysis. Of course, you can find free options available, but they have limited functionality.

Here’s our guide on excellent competitor research tools to help you maximize your CPA marketing efforts.

Landing page builders

You should check if your CPA network offers ready-made landing pages before investing in a landing page builder. If they don’t, a decent builder may cost around $20. Ensure that your choice of landing pages is downloadable to avoid vendor lock. Besides, we’ve provided several other criteria for choosing a landing page builder that’ll drive conversions.

Translating tools/agencies

If you want to target a lucrative GEO, you shouldn’t let language be a barrier. Upwork, Fiverr, and other freelancing platforms offer translation services, which cost around $5 per hour if you get a good deal. Translation services usually charge per number of words, and as long as you need only an ad translation, it shouldn’t be very expensive.

For shorter texts, Google Translate may be enough. However, using a professional service will increase your ads’ credibility and proper localization. For short translations, services like Transey or One Hour Translations usually charge less than 10 cents per word. Pricing depends on your chosen language.

Creatives and images

Free stock images are becoming increasingly popular, but the truth is that most users can recognize them as such. Paid platforms like Shutterstock and RawPixel offer more options and cost around $29 per month.

When driving traffic to your offers, Adsterra provides affiliate marketers with a range of marketing materials as creative ad formats. Within your ad campaign, you can test and try to select the best performing ad format for your offer. Among ad formats are Social Bar and its skins, Popunder, In-Page Push, Interstitial, Banner Ads, etc.

Using Adsterra’s powerful and non-intrusive creatives, including the proprietary, advanced Social Bar Ads, you boost your CTRs up to 30x higher (than other web push ads). These are ad types that adapt to any website, desktop, or mobile. It gives you an amazing opportunity to start affiliate marketing fully geared up for winning results.

Outsourcing

The majority of aspiring affiliate marketers begin as a one-person operation. However, as your business grows and your responsibilities multiply, managing everything on your own may become a hard mission.

You can’t help outsourcing some of your daily tasks to freelancers at this point. Thankfully, there are plenty of freelancers with experience in various fields, including:

• Website design,
• High-quality content creation or its editing,
• Email templates and email campaigns,
• Other marketing materials,
• Social media management, and additional incentives.

Your website associated costs

It’s possible that you already have a website. If not, here’s how much a basic website costs.

On average, you can expect to pay an upfront cost of around $200 to build a website, with a maintenance cost of approximately $50 per month. Here are the key costs involved:

Website feature	Upfront Website Cost
Website domain	$12 – $60
Website hosting	$35 – $600
SSL certificate	$0 – $200
Website template or theme	$0 – $200
Apps and Integrations	$0 – $100
SEO and Marketing	$0 – $90

Using a website builder like WordPress or hiring a web designer are the main ways to create a website. Your choice will have a significant impact on the cost of your website. Using a web builder is free, but hiring a web designer can cost over $5,000.

While WordPress is a free, open-source platform, you’ll have to pay for hosting, themes, plugins, and professional help from a developer, which will add to your overall costs. Slightly more, if you’d like a custom landing page.

Training

Investing in training isn’t strictly necessary to start as an affiliate marketer. On the other hand, proper guidance can shorten your learning curve, reduce trial and error and save you a lot of frustration and disappointment. Well-chosen training accelerates your progress, and significantly increases your chances for success. Nowadays, getting high-quality affiliate marketing education can cost anywhere from $50 per month to $997 per year (one-off).

Adsterra offers you the proprietary FREE affiliate marketing course to help you grow your thriving affiliate business.

Getting your hands on high-quality, structured guidance will almost certainly shorten your learning curve, reduce trial and error, speed up your progress, and improve your chances of meeting your financial objectives.

Tips for managing and reducing affiliate marketing costs

While having the proper budget is essential, you should also devise a strategy for keeping your expenses low. Here are some tips to help you maintain healthy finances:

Spend less on hosting

You may be able to save a few dollars and better understand your campaign’s technical side if you take the time to learn how hosting works.

Look for a CPA network with short hold times

All CPA networks require you to wait a certain amount before withdrawing your recurring commissions. Beginners should look for networks with the shortest holding periods. Otherwise, you might have to wait longer to launch your next affiliate marketing campaign, which can throw off your schedule.

Set postback for granular monitoring of your ad campaigns

With a bit of experience, applying S2S Tracking and getting a postback gives you a great advantage and accelerates your affiliate marketing strategy manifold.

S2S (server-to-server) is a cookieless method for conversion tracking. Favorably, it’s independent of third-party cookies. Only the server fulfills the tracking request bypassing ad-blockers, being more precise than, say, pixel tracking.

Adsterra is one of the leaders in this field. With Adsterra, you spend wisely. You direct genuine traffic from 248 GEOs to your offer. You can choose pricing models like CPM, CPA, and CPC that suit your offer and your online advertising strategy for the best CTRs and ROI.

Here is a small guidance for launching your ad campaign with Adsterra and being in control of your affiliate marketing costs:

1. Register with Adsterra as an Advertiser in minutes. Compared to other market players, Adsterra is known for having the fastest moderation.
2. Set and tune your ad campaign with 20+ settings at hand.
3. Apply the optimization tools and polish your ad campaign as you progress.
4. Consult the Partner Care support team for any technical aspects or stat data.

Plan ahead of time

To increase your chances, you must plan ahead. We recommend estimating your daily budget, keeping the hold period in mind, and determining the best tool selection.

For example, if you plan to run an affiliate marketing campaign for ten days and your total traffic budget is $300, you should estimate that your daily budget will not exceed $30.

When working with a limited budget, you should only promote specific offers. When joining an affiliate network or affiliate marketing program, it’s essential to consider the types of offers available. There are, however, additional factors to consider:

• Run your campaigns in smaller GEOs.
• Choose a single vertical and stick to it, but run multiple marketing campaigns to test more offers.
• Optimize your campaigns only after you’ve gathered enough data.
• Make a strategy and stick to it.
• Use white and blacklists.
• Don’t set low bid values because you won’t be able to take advantage of the traffic’s full potential.
• Avoid Tier 1 GEOs and other GEOs with large volumes.
• Use auto-optimization systems only if you completely understand how they work.

Anticipate your possible mistakes

Multiple mistakes can lead to failure in affiliate marketing, and here is a list as per forewarned is forearmed:

• Lack of proper guidance.
• Promoting low-quality products.
• Not tracking performance.
• Not making quality creatives when launching ad campaigns or making misleading creatives.
• Targeting keywords with a lot of competition.

Skip them when you can for the best and quickest wins for your beginnings.

Final words

Usually, affiliate marketers choose their own strategy, and hence, that determines the investment. The cost of tools ranges from free to extremely expensive. And the more advanced you become, the more money you’ll need for additional tools, which will help you earn more money. It’s a self-propelling cost and profit spinning wheel.

The most significant expense is traffic, but how much you spend on it entirely depends on your budget. Keep in mind that investing $100 in traffic and then quitting because you lost the majority of it is a surefire way to miss out on a fantastic opportunity. It takes time and good affiliate marketing efforts. Once you’ve put in enough time and effort in the testing phase, you’ll notice that results do appear, and you’ll gradually work your way up to larger profits!

Affiliate marketing cost FAQ