Thursday, January 3rd, 2013

Affiliate Marketing

by Rahimah Sultan

photo from blog

 

Affiliate Marketing is a branch of Internet marketing where the advertisement publisher gets paid for every customer or sale provided by him. Affiliate marketing is the basis for all other Internet marketing strategies.

 

In affiliate marketing, affiliate management companies, in-house affiliate managers and third party vendors are effectively utilized for E-mail Marketing and Search Engine Marketing for the success of the product. Web traffic can be traced with the help of a third party or owners of the affiliate programs. Originally, affiliate marketing involved lots of spamming, false advertising, trademark infringement, etc. Since the invention of complex algorithms and advanced security, it’s safer to do business and shopping online. This even led to better scrutinizing of terms and conditions by the merchants. As affiliate marketing opened up more opportunities, it also increased marketing competition.

 

Due to this pressure in-house affiliate programs for merchants were replaced by out-sourced programs. The companies that offer this service have expert affiliate marketing and network program managers who have various affiliate program management techniques. These affiliate networks have publishers associated with them who help with the advertising.

 

Affiliate marketing was started by cdnow.com who had music oriented websites. They placed a list of music albums on their site and paid others to put those links in their websites when a visitor bought an album through their site. The first company to link with cdnow.com was Geffen Records.

 

Two months later, a woman proposed an offer to Amazon to sell their books on her website for a certain percentage. They liked the idea and started the Amazon Associates Program. It was more of a commission program where they received a commission if a visitor clicked their links and banners on other’s sites and bought something. Since its inception, the affiliate network has been adopted by various businesses like travel, education, telecom, mobile, gaming, personal finance, retail, and subscription sites.

 

The compensation methods used are Cost per sale (CPS), Cost per action (CPA), Cost per mile (CPM) and Cost per click (CPC). The first two are the main methods used today. This is because in CPM and CPC, the visitor that turns up on a particular website might not be the targeted audience and a click would be enough to generate a commission. CPS and CPA require that the visitor not only click on the link but also buy something or sign up for some service, which proves that the visitor is in a targeted audience. Only then does the affiliate get paid. So the affiliate should try to send as much targeted traffic as possible to the advertiser to increase his/her returns. For this reason, affiliate marketing is also known as performance marketing. It totally depends upon the performance of the affiliate.

 

The affiliate team can be differentiated from a sales team by the nature of their jobs. The job of the affiliate team is to get targeted traffic to a point, then the sales team must influence the visitor to buy the product or service.

 

This is a very effective method because the money is being paid only when results have been achieved. The publisher incurs all the cost except that of initial setup and development of the program, which is incurred by the merchant. Many businesses credit affiliate marketing for their success.

 

 
 
 
 
 
 

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