*Affiliate Marketing

Affiliate Marketing

Affiliate Marketing is a derivative of Internet marketing where the advertisement publisher gets paid for every customer or sale provided by him. If we are totally honest, Affiliate Marketing is the basis for all other Internet marketing strategies. In one way or another, the ad publisher gets compensated for your success. Ideally, a true symbiotic relationship would ensure he is not compensated when you sell nothing. The key here is the word “ideally”. It is difficult, but not impossible to find publishers who will accept that type of relationship. When you do, expect to pay a bit more for each success.

This article will ultimately focus relationships where publishers only get paid for success. In general, in this type of marketing, affiliate management companies, in-house affiliate managers, and third party vendors are effectively utilized to run E-mail Marketing campaigns, Search Engine Marketing, as well as RRS Capturing and Display Advertising for the success of the product. The web traffic can be traced with the help of a third party or yours of the publisher’s own affiliate programs. A lot of work is involved in this process.

Initially, marketing by this method involved lots of spamming, false advertising, trademark infringement, etc. But, after the invention of complex algorithms and advanced security, this has been regulated to make it safer for all parties doing business and shopping online. At the same time, these algorithms and security procedures led to the better scrutinizing of terms and conditions mandated by merchants selling products and services. Affiliate marketing became more profitable with the opening of more opportunities, but at the same time it radically increased competition in the marketplace.

Due to this increased market volume pressure, in house affiliate programs for merchants became a thing of the past and were replaced by out-sourced affiliate programs. The companies that offer this service have expert affiliate and network program managers who employ various affiliate program management techniques. These affiliate networks have publishers associated with them who help from top to bottom with the advertising part of the relationship.

Affiliate marketing was started by cdnow.com, a company specialized in music oriented websites. They placed lists of music albums on their site and they paid others if they put those links in their websites and a visitor bought a cd.now album through that site. The first company to link with cdnow.com was Geffen Records. Two months later, a woman saw similar opportunity and offered to sell Amazon’s books through her website for a commission on each sale. Amazon liked the idea and started the Amazon associates program. It ended up more of a commission program where affiliates received a small compensation if a visitor clicked their links and banners on other’s site and bought anything through it.

Since its invention, the affiliate network has been adopted by various businesses like travel, education, telecom, mobile, gaming, personal finance, retail, and subscription sites, the most common being adult and gambling sectors. In the UK alone, affiliate marketing produced £ 2.16 billion.

The compensation methods used are Cost Per Sale (CPS), Cost Per Action (CPA), Cost Per Million (or Cost Per Message, dependent upon the publisher) called CPM, and Cost Per Click (CPC). The first two are the more popular methods today. This is because with CPM and CPC, the visitor who turns up on a particular website might not be the targeted audience and a click alone would be enough to generate commission. CPS and CPA have a compulsion that the visitor not only clicks on the link but also buys something or signs up for some service after it which proves that he is among the targeted audience. Only in this second case does the affiliate get paid.

This encourages the affiliate to send as much targeted traffic as possible to the advertiser in order to increase his/her returns. When this happens, affiliate marketing is also known as ‘performance marketing’ because compensation totally depends upon the performance of the affiliate. The affiliate team can be differentiated from a sales team by virtue of the nature of their function. The job of the affiliate team is to drag targeted traffic to a point and from that point it’s the job of the sales team to influence the visitor to buy the product or the service.

This is a very effective kind of advertising 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 give credit to this method of marketing for their success.

This type of marketing holds the greatest potential benefit for high-end product and service providers. It keeps the publisher out of the weeds so to speak. It forces focus on a targeted marketplace capable of wanting and using the high-end service or product. This type of marketing is particularly advised for those small businesses specializing in selling legitimate business opportunities. Don’t expect to find publishing partners if your business opportunity doesn’t begin with a quality product or service. For instance, if you are trying to sell ‘Gifting’, don’t expect find publishers willing to partner with you.

As noted in previous articles, make sure you have a product you believe in that is obviously needed and of good quality. Once you have that product, a significant ‘opportunity’ can be attached to it. If you have both, go looking for an affiliate publisher. This combination should lead to almost certain success.

Richard Loewenhagen
CEO
www.LivingMyLifestyle.com