What is Affiliate Marketing - Do not click me

2007-06-06T19:04:00.000-07:00

What is Affiliate Marketing?

Marketing and promoting website through affiliates is affiliate marketing. The main objective of affiliate marketing is to bring traffic, make sales, market products online and get new subscribers. Affiliate marketing includes 3 types of people online namely

The Merchant or The Advertiser
The Publisher or The Affiliate
The Visitor or The Customer

The Merchant or The Advertiser

The Merchant is the guy whose products are to be promoted. He produces the product which are to be marketed online using websites. The product can be either a soft product[ like a software or an e-book] or a hard product which can be sold online. The Merchant hosts a website describing his product and services.

The Publisher or the Affiliate

In most cases the publisher is the affiliate. Affiliate is the guy who will be promoting the merchant's product for some commission. The publisher has to sign up as an affiliate to the merchant and then promote it. The affiliate may or may not have a website. He will be given a affiliate url to promote.

The Visitor or The Customer

Visitor in general terms means a person viewing a website. But in terms of affiliate marketing, a guy is said to a visitor if he comes to the merchant's website through an affiliate website or url. He is also called a lead. If the visitor referred by the affiliate makes a purchase in the merchant's website he is qualified as an customer.

The Process of Affiliate Marketing

The merchant creates a website with his products or services for sale. Once the site is hosted he starts to recruit affiliates to market his website. He may use a affiliate software or a third party to track the affiliate stats. Now anyone can sign up as an affiliate. Its' free to become an affiliate. An affiliate can be paid for many ways namely

Cost Per Sale - CPS
Cost Per Action - CPA
Pay Per Click - CPC
Pay Per Impression - CPM

Cost Per Sale

This is the most widely used compensation method for Affiliate marketing. An article from wikipedia reads that 81% of affiliate programs today use revenue share as the compensation. Here an affiliate is paid a commission only when his visitor makes a sale on the merchant's site. The commission may range from 20% to 75%.

Cost per Action

This is the second most used method of affiliate marketing. Here the visitor from the affiliate site should complete a stated action . The action may be a filling a form, subscribing to a merchant newsletter, making a download or even submitting his contact information. When ever such an action is completed the affiliate is paid by the merchant. The commission paid is very low compared to CPS but is very effective and the conversion rate is high.

Cost Per Click

This is the oldest method of affiliate marketing. Here the affiliate is paid when his visitor makes a click on the merchant's link. This method of affiliate marketing is very rarely used . The biggest pitfall of CPC is clickfraud.

Pay Per Impression

Here the affiliate is paid whenever he sends a visitor to the merchant's website. There is no need for the visitor to make a purchase or even to complete any action. Here too affiliate commission is very low.

Once the affiliate registration is complete he will be provided with a affiliate url which he or she has to promote. Whenever the affiliate sends a visitor to the merchant via the affiliate url he is said to have made a referral. When the referral makes anyone of the above mentioned action affiliate is paid commission.

To Be Continued in the next post
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