A Basic Introduction to Affiliate Marketing
In my final post in my recent series on cash flow in your network marketing business, I introduced affiliate marketing as a powerful tool for building cash flow. Today I thought it would be appropriate to give a basic introduction to affiliate marketing to help bring clarity to the topic.
Affiliate Marketing is a variation of online marketing, in which the advertisement publisher gets paid by the customer or by the sale, for any transactions generated through his/her affiliate marketing link. Affiliate marketing is starting point for all other online marketing strategies.
In this type of internet marketing, affiliate management companies, in-house affiliate managers and third party vendors are utilized to generate sales, using a variety of online marketing methods. These methods include, but are not limited to: E-mail Marketing, Search Engine Marketing, RSS Capturing and Display Advertising to generate sales traffic. Web sales traffic is traced with the help of a third party or affiliate program. In the early days of affiliate marketing, this method involved lots of spamming, false advertising, trademark infringement, etc...; however, the invention of complex algorithms and advance security measures has brought these practices under control, making it safer for doing business and shopping online. These measures also brought about greater scrutiny regarding the terms and conditions offered by the online merchants. Affiliate marketing became more profitable with the opening of greater opportunities, but it has also substantially increased the marketing competition.
This pressure effectively brought an end to in-house affiliate programs, as merchants began to replace them with out-sourced programs operated by third party vendors. The companies who offer this type of service have expert affiliate and network program managers, who advise on effective program management techniques. Additionally, these third party affiliate networks have experienced publishers working with them to help direct the advertising efforts.
Affiliate marketing was pioneered by cdnow.com, a publisher of music oriented websites. They placed listings of available music albums on their site and then paid others to publish those links on their own websites. When a visitor bought an album through the cdnow link, the website publisher received compensation. The first company to link with cdnow.com was Geffen Records. Two months later, a woman approached Amazon.com with a proposal, that she would sell Amazon’s books on her website if she was paid a certain percentage in return. This idea was well received and led to the formation of the Amazon associates program.
Since its invention, the affiliate network has been adopted by a large segment of the business community. Things like travel, education, telecom, mobile, gaming, personal finance, retail, and subscription sites, all offer affiliate marketing programs. In the UK alone, affiliate marketing produced £ 2.16 billion in revenues.
The compensation methods used in affiliate marketing are Cost per sale (CPS), Cost per action (CPA), Cost per mile (CPM) and Cost per click (CPC). The latter two are the more well known of the methods. This is because in CPM and CPC methods, the visitor comes to a particular website might not be part of the targeted audience and a click would be enough to generate commission. In the CPS and CPA methods, visitors have a compulsion that the visitor not only clicks on the link but also to make a purchase or signs up for some service. It is at this point, that they are among the targeted audience. The key for the affiliate is to try and send as much targeted traffic as possible to the advertiser in order to increase his/her returns. For this reason affiliate marketing is sometimes referred to as performance marketing, since compensation totally depends on the performance of the affiliate. There is a distinct difference between an affiliate marketer and a sales person, as seen in the nature of their roles. The job of the affiliate marketer is to bring targeted traffic to a point and from that point it becomes the job of the sales person to influence the visitor to buy the product or service being offered.
Affiliate marketing is a very effective marketing model, because money is only being paid 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.
To learn more about affiliate marketing, visit the training section of Affilorama
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Affiliate Marketing is a variation of online marketing, in which the advertisement publisher gets paid by the customer or by the sale, for any transactions generated through his/her affiliate marketing link. Affiliate marketing is starting point for all other online marketing strategies.
In this type of internet marketing, affiliate management companies, in-house affiliate managers and third party vendors are utilized to generate sales, using a variety of online marketing methods. These methods include, but are not limited to: E-mail Marketing, Search Engine Marketing, RSS Capturing and Display Advertising to generate sales traffic. Web sales traffic is traced with the help of a third party or affiliate program. In the early days of affiliate marketing, this method involved lots of spamming, false advertising, trademark infringement, etc...; however, the invention of complex algorithms and advance security measures has brought these practices under control, making it safer for doing business and shopping online. These measures also brought about greater scrutiny regarding the terms and conditions offered by the online merchants. Affiliate marketing became more profitable with the opening of greater opportunities, but it has also substantially increased the marketing competition.
This pressure effectively brought an end to in-house affiliate programs, as merchants began to replace them with out-sourced programs operated by third party vendors. The companies who offer this type of service have expert affiliate and network program managers, who advise on effective program management techniques. Additionally, these third party affiliate networks have experienced publishers working with them to help direct the advertising efforts.
Affiliate marketing was pioneered by cdnow.com, a publisher of music oriented websites. They placed listings of available music albums on their site and then paid others to publish those links on their own websites. When a visitor bought an album through the cdnow link, the website publisher received compensation. The first company to link with cdnow.com was Geffen Records. Two months later, a woman approached Amazon.com with a proposal, that she would sell Amazon’s books on her website if she was paid a certain percentage in return. This idea was well received and led to the formation of the Amazon associates program.
Since its invention, the affiliate network has been adopted by a large segment of the business community. Things like travel, education, telecom, mobile, gaming, personal finance, retail, and subscription sites, all offer affiliate marketing programs. In the UK alone, affiliate marketing produced £ 2.16 billion in revenues.
The compensation methods used in affiliate marketing are Cost per sale (CPS), Cost per action (CPA), Cost per mile (CPM) and Cost per click (CPC). The latter two are the more well known of the methods. This is because in CPM and CPC methods, the visitor comes to a particular website might not be part of the targeted audience and a click would be enough to generate commission. In the CPS and CPA methods, visitors have a compulsion that the visitor not only clicks on the link but also to make a purchase or signs up for some service. It is at this point, that they are among the targeted audience. The key for the affiliate is to try and send as much targeted traffic as possible to the advertiser in order to increase his/her returns. For this reason affiliate marketing is sometimes referred to as performance marketing, since compensation totally depends on the performance of the affiliate. There is a distinct difference between an affiliate marketer and a sales person, as seen in the nature of their roles. The job of the affiliate marketer is to bring targeted traffic to a point and from that point it becomes the job of the sales person to influence the visitor to buy the product or service being offered.
Affiliate marketing is a very effective marketing model, because money is only being paid 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.
To learn more about affiliate marketing, visit the training section of Affilorama
Bookmark & Share 
Posted by Carl Willis at 2/2/2010 3:42 PM 
Categories: Affiliate Marketing
Tags: affiliate marketing online marketing marketing
Categories: Affiliate Marketing
Tags: affiliate marketing online marketing marketing
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