In the 1990s, most of the people remember it as the time of growth of music and Shahrukh Khan’s movies. While this is quite true but it also brought you the most useful thing which is the World Wide Web. Also known as the internet, the web vast expanse of information just at a click.
This new technology or media made many companies realize vast opportunities to market their product and services with the help of millions of websites which consumers visit every day.
In the mid-90s, as search engines emerged the internet became an e-commerce and information machine. Website owners were creating content that was valuable to the visitors. Website owners also wanted remuneration for their hard work.
Online advertising like CPM or the fixed placement were the early form faced competition with a new concept of online advertising known as Affiliate Marketing.
What is Affiliate Marketing?
I think the easiest way to explain affiliate marketing is that it’s a way to make money online. A person as a publisher gets rewarded for helping someone’s business online by promoting their product, service or site.
There are several ways to do these types of promotions. But in most of the cases, it involves a publisher earning a commission when someone follows the link on his/her blog to some other site. Then they buy something there.
Other ways can be where the publisher earns an amount for referring a visitor who takes any action. For instance, when they sign up, they give an email address. After that, they complete an online survey, where they leave their name and address, etc.
These commissions are generally a percentage of a sale. But it can also be a fixed amount per conversion.
These conversions are tracked when the publisher uses the coded link. The advertiser tracks the initial point of conversion with the help of cookies. Sometimes the advertiser might give ‘coupon codes’ to the publisher to track the conversions.
- Advertisers generally prefer affiliate marketing as a way to promote their products. Since they know they will pay only for the advertising when there will be a conversion.
- Publishers often prefer affiliate marketing. Earnings can go well more than any cost per click or cost per impression advertising as they find a product that is relevant to them.
Key Terms to Understand Affiliate Marketing
The web site owner or the merchant who pays affiliates for sending traffic to their site to make purchases or generate leads.
It is the webmaster or site owner who earns revenue, usually commission-based, for the conversion of leads, clicks or sales on the site of the advertiser.
3. Affiliate program
It is an automated marketing program. Here, a Web advertiser recruits Webmasters to place the merchant’s banner ads or buttons on their Web site.
The webmasters get a referral commission or fee from sales when the customer has clicked the affiliate link to get to the merchant’s Website. Here, they make the purchase.
Types of Affiliate Programs
There are different types of affiliate programs that advertisers offer. There is a search engine affiliate program in which they place text links or banners. You’ll work on a pay-per-click fee.
- There are Email list affiliates programs which include Email newsletters and are usually paid when a person continues with the advertisement of an opt-in email list. When you are an affiliate of any merchant, it usually means you will get a commission per sale on the advertiser’s Website.
2. Generally, pay-per-click affiliate programs pay the least amount, as it pays for per thousands of clicks (CPC).
3. There are Pay-per-lead programs in which you provide the links to downloads, trial offers, e-mail opt-in lists and so on. It depends on the advertiser. You may get a pay per lead generation or you may not get any payment unless the user subscribes and pays for a full service from the advertiser. Again, you may also receive fees for both instances.
4. Pay-per-sale affiliate programs are also called revenue sharing. Usually, they offer the highest commissions. And you’ll typically receive a set amount per sale or a percentage of the total sale. As a user has to purchase something, one may find this program suits best to high-traffic affiliate sites.
How Affiliate Marketing Works
An ‘advertiser’ is an online advertiser who has a transactional website. One can buy products or services here.
An ‘affiliate’ is an online publisher or partner who has access to traffic.
These publishers are the website owners who send traffic, via links on their site. Whenever any sale is generated they will earn the agreed commission. This model is commonly known as Cost Per Action (CPA).
Publishers use several kinds of promotional tools and they own these. In all the cases publisher takes a risk of sending the traffic at no cost as they will get rewards if their traffic completes a purchase, hence advertisers only paid on the results.
Suppose a consumer visits a website (for example a shopping portal or directory) which is of the publisher.
The customer finds a product (or retailer) of his choice and clicks the link. It will take him to the advertiser’s site to help him in reviewing or purchasing the product.
The customer completes the purchase online and completes the sale for the advertiser. There is tracking software that records the key purchase data such as sale amount, IP, date and time, etc and reports this to Affiliate Window. The customer journey has now ended.
And it allows the advertiser a period of ‘grace’ in which he considers the sale complete and pays the commission to the publisher for sales he generated.
Choosing an Affiliate Program
Now, when you’ve decided affiliate marketing is the right choice for your business, there are several ways to do it. It’s not the right strategy for every business. It depends on the kind of business you have because there are such a large number of affiliate programs to choose from. Also many are built differently.
The best rule of thumb is to choose affiliate programs that offer something relevant to your site.
For example, if your Web site is about event planning as a wedding planner, look for affiliate programs that relate to the topic. Like relationship blogs, online merchandise selling or something that can relate to a wedding.
There is nothing worse than advertisements that stand out like a sore thumb on your pages (e.g., online dating ads placed on a Web site about education material for kids).
Take the time to check out the advertiser before joining. Ensure they do payout to affiliates and that their program is not a scam.
Have a good look at what the advertiser is offering in terms of tracking and reporting tools for affiliates. Good programs will give you a way to access real-time automated statistics to view conversions, sales, and commissions. Be sure you have ad and product display options to integrate the advertising into your Website.
Use your traffic and reporting tools to determine which type of program will have a better chance of success on your site.
Affiliate Marketing – Easy Money?
Affiliate Marketing is not easy money but it can be lucrative. Most people who try it make very little as it relies upon numerous factors including:
- Traffic (Yes! high traffic helps a lot)
- Finding relevant products
- Finding quality products
- Building trust with your readers
- Having a readership who is in a ‘buying mood’
- You being able to write good sales copy (and more)
Affiliate marketing involves several risks. Like if you just push too hard or promote the products of low quality you can lose readers. As a result, it will degrade your reputation and brand.
Affiliate marketing doesn’t work well on all the blogs. Some blogs are on topics of those kinds where it is hard to find products to promote and other blogs are there which attract audiences who are not in a buying frame of mind and for other blogs it may not fit with the blogger’s style or approach.
We just need to keep it simple and easy for the customer, don’t push too hard and try to work according to the readers’ state of mind what they want and what they need and bang! You can earn with affiliate marketing.