The Basics of Affiliate Marketing
Written by admin on Tuesday, August 18th, 2009 in Affiliate Marketing.
You’ve probably heard the term “affiliate marketing” if you’ve ever looked into internet marketing. Often affiliate programs will promise you instant, huge wealth with little effort or time invested.
You should know that it’s never that easy. It is possible for even skeptics to get caught up in the enthusiasm of an affiliate program, but don’t get carried away. There are a few bad actors out there, and you don’t want them to get any of your money or time.
Here are some of the basics of affiliate marketing.
When you join an affiliate program, this means that you, the affiliate, are trying to send new visitors and potential customers to a business in exchange for a financial reward. When you’ve succeeded in sending a paying customer to the site of the business you’re affiliated with, you get paid.
Affiliate networks can be quite complicated, however, with the merchant, the network, the publisher (that’s you – you’re publishing their ads), and the customer all playing their roles in the process.
The affiliate web site business model has exploded in popularity in recent years. Now instead of just merchants and affiliates, there are other layers of the infrastructure, with affiliate management agencies, specialized third party vendors, and “super-affiliates.”
But for your part, it doesn’t make much of a difference to your success if you sign up as an affiliate directly with the company – like Amazon’s affiliate program – or with an affiliate management agency. Commission Junciton is one such affiliate management agency.
Affiliate marketing does have some of the same basic elements as ordinary online sales strategies. You may use a traditional advertising technique, or you may use organic search engine optimization (SEO), email marketing, and displays on your site such as banner ads.
But there are also affiliates that use more internet-specific techniques. Perhaps this is writing reviews of the products and services offered on a blog, social media platform, or article directory. But the goal in all of it is to use one website to drive internet traffic to another site.
The biggest sectors in affiliate marketing today are the gaming, adult, and retail sectors. The sectors that are anticipated to have the greatest growth in coming years are finance, travel, and mobile phone marketing. Business-to-business marketing is growing too. This is slightly different from business to consumer marketing.
The most commonly used methods of compensation, used by 80% of today’s affiliate programs, are revenue sharing setups. This is sometimes called cost per sale (CPS). Around 19% use cost per action (CPA), and the remainder use cost per click (CPC).
Amazon’s affiliate program is a cost per sale affiliation. An affiliate is paid a commission if a sale has been completed with Amazon if the customer gets to Amazon by way of the link on the affiliate’s website.
In a CPA scheme, the affiliate would get paid if a visitor signs up for an email subscription or a membership on a site by getting there through the affiliate’s site. With cost per click, Google Adsense is a good example. The affiliate runs contextual ads on his or her website, and whenever someone clicks on one of the ads, the affiliate receives a commission.