AFFILIATE MARKETING

What Is Affiliate Marketing?

Affiliate marketing is the term used to describe a revenue-sharing plan where an online automated marketing program lets Webmasters place an advertiser's banner ads or buttons on their own Web site. Webmasters will receive a referral fee or commission from conversions when a customer has clicked the affiliate link and performs the desired action, such as make a purchase or opt-in for downloads or newsletters on the advertiser's site. Advertisers invest in affiliate programs for lead generation, and, of course, sales. Affiliate Marketing is a performance-based marketing strategy. Essentially, a business only pays a commission when a predefined action has taken place; such as a sale, lead, or subscription. An Affiliate Marketing strategy is an effective Affiliate Marketing strategy allows businesses to build their brands at a lower cost. Many advertisers are finding this channel a cost-effective way to offset the rise in other advertising avenues, such as pay per click, pay per impression, and more traditional forms of marketing, such as print or television.

HOW EXACTLY DOES AN AFFILIATE PROGRAM WORK?

Affiliate marketing is a system of internet marketing that involves two parties, an affiliate and a merchant. An affiliate is a website owner who markets another’s products or services on his website. Simply put, the affiliate is the middle-man between online shoppers and the merchant’s products. The affiliate advertises for the merchant either with banner advertisements displayed on his website, or with redirecting links, or even promotional text and information about the product. Each time a sale is completed, the affiliate receives commission. It’s pretty much a win-win situation for both parties; the product owner is generating revenue without incurring advertisement costs and the affiliate is profiting just by advertisement of the product. Some ecommerce sites like Amazon.com for example, coordinate their own affiliate or associate programs while other websites avail themselves of the many affiliate companies around.

What is an Affiliate Network

An Affiliate Network is the intermediary between merchants and affiliates. A network provides you with tracking technology, statistical reporting tools, payment processing, and in most cases, access to a large base of affiliates. The network is also where you will host all of your creative material. It is important to do research to find out which network has the best solutions for your business. Some networks are more focused on retail programs and some are more focused on lead generation programs. You also have niche networks that focus on a particular market sector.

Some of the more common networks are:

1. Google Affiliate Network

2. ShareASale

3. Commission Junction

Key Terms To Understanding Affiliate Marketing:

advertiser
The advertiser is the Web site owner or merchant who pays affiliates for sending traffic to their site to make purchases or generate leads. Also called merchant.

affiliate
The Webmaster or site owner who earns revenue, usually commission-based, for conversion of leads, clicks or sales on the advertiser's site.

affiliate program
An automated marketing program where a Web advertiser recruits Webmasters to place the merchant's banner ads or buttons on their own Web site. Webmasters will receive a referral fee or commission from sales when the customer has clicked the affiliate link to get to the merchant's Web site to make the purchase.

Conclusion

With the right controls in place, an Affiliate Marketing program can be beneficial for your business. Before you embark on setting up your program, make sure your resources are in place.