What you need to know about Affiliate Marketing…
Affiliate Marketing is a way of promoting online business through affiliate programmes and advertising that pay the affiliate (or publisher) a type of commission based on the amount of business their website brings the merchant company.
It’s a form of revenue sharing or commission based advertising. The term “affiliate marketing,” however, is often associated with network marketing or multi-level marketing and therefore many companies prefer to use the term “performance marketing”. Affiliate marketing is the most cost effective sort of marketing there is, and is actually incredibly efficient. For this reason, many companies (especially those that started in the early days of e-commerce) owe a tremendous amount to affiliate marketing (amazon.com is a good example) and it has now become normal for companies to include affiliate marketing in many of their plans.
There are three types of compensation methods that are associated with affiliated marketing.
- Cost per Click (CPC) or Cost per Mil (CPM): Basically, the affiliate earns by how many clicks the advertising on his her site generates, or by just having the advert published on the website. But because of click fraud and many other questionable tactics, CPC is no longer the general form used for affiliate marketing.
- Cost per Action (CPA): how much the advert generates interest by the clicker to actually buy or register at the advertised site.
- Cost per Sale (CPS): based strictly on sales. In other words, an affiliate is paid if the clicker actually purchases something on the advertised site.
Google’s Adsense is also a very well known type of affiliated marketing, but is not really considered as true affiliate marketing as the adverts usually centers around the theme of the website they are displayed (known more as contextual advertising.) Google does not also directly sell a specific product, but generates money in other ways.
Affiliate marketing is not limited to only display-adverts on an affiliate site. When an affiliate joins in with an e-commerce merchant of some sort (be it a subscription service, a shopping site etc…) payment is received through referrals done from the affiliate’s website – done through the following methods:
- Pay-per click systems: basically, the affiliate displays adverts on their site and is paid when a customer or internet user clicks on that website
- RSS feeds on Blogs: even personal sites can sit under this category. Blogging is fast becoming a staple form of marketing and promotion, and affiliate marketing partners well with this form of online communication
- Comparison sites and shopping directories: such as review sites or legit advertising sites
- Loyalty sites: this is when a reward system is in place via a cash back or points back system (or charitable donations)
- Coupon sites: focus strictly on marketing and promotions
- Email lists: legit email lists to subscribers of the affiliate’s website etc – NOT spam
- A registration path: when a person registers with a specific site, be it for a newsletter or subscription, offers from other companies are represented and advertised
- Networks: there are many affiliate marketing networks. Some even function on a multi-tier or multi-level marketing sort of set up.
Affiliate Marketing can be the difference between make or break, it can drastically increase your brand awareness, your revenue and is without a doubt the most efficient and cost-effective form of sales and marketing.
NB: Stay tuned for a complete list of the best affiliate marketing sites available on the internet. Alternatively, please sign-up using the subscription email box at the top right of this page and have it automatically delivered to you.