What is Affiliate Marketing?

What is Affiliate Marketing?

A common way to make money online is through affiliate marketing.Affiliate marketing is internet advertising that allows any online business to affiliate themselves with web site owners (known as affiliates or publishers) using affiliate programs. Affiliates make money by generating sales, leads and traffic for the Merchants business. Merchants who sell goods and services online or seek other affiliate business activity typically use one of the affiliate program commission payment models below:

Cost Per Sale (CPA) 

A visitor referred by the Affiliate purchases goods and services from the Merchant. This payment structure is referred to as - cost per sale or cost per acquisition (CPA). 

Cost Per Lead (CPL) 

A visitor referred by the Affiliate completes a form on the Merchants web site. This payment structure is referred to as - cost per lead (CPL). 

Cost Per Click (CPC)

A visitor to the Affiliates web site clicks on a Merchant's banner and visits the Merchant's web site. This payment structure is referred to as - cost per click (CPC).

Merchants - Affiliate marketing is a excellent way to build your own large online sales team and drive customers to your affiliate business web site on a 'pay for performance' basis. As a Merchant you can build your own pay per sale, pay per lead or pay per click Affiliate program and use graphic, text and custom HTML/Flash advertisements to promote and drive customers to your web site. Affiliates will join your program and display your advertisements on their web sites, sending customers and traffic back to your site. All the Affiliate programs you build are free and provide you with comprehensive online management and sale reporting tools, so that you can track your sales, impressions and the customer traffic reaching your web site. 

You have full control over your Affiliate program, what country your traffic comes from and which Affiliates promote your program. You also have complete control over the rate paid for each sale(cpa), lead(cpl), click(cpc) or the display of one thousand of your banners(cpm). You may also choose to use our additional promotional service ensuring that your program reaches a very wide and large US, European, Asian or Australian based customer audience. 

Affiliates - Affiliate marketing allows you to earn high income from your web site while providing related services to your visitors.You can start earning money today with your web site by joining one of the thousands of Affiliate programs located on this site. Many online businesses offer Affiliate programs as a way of generating sales and traffic for their online businesses. These companies will pay you high commissions based on the traffic they receive from advertisements you place on your site. You can choose from pay-per-sale, pay-per-lead, pay-per-click or pay-per-display Affiliate programs. 

All the listed programs are free to join and provide you with online statistics so that you can track your commissions. Once you have joined an Affiliate program, you will be paid according to the programs pay type. (i.e.) a pay-per-sale program pays you each time a sale is made by a customer sent from your web site; a pay-per-lead programs pays you each time you forward a lead to the Merchant; a pay-per-click program pays each time an advertisement is clicked and pay-per-display of 1000 of a merchants banners(cpm).

Following are some of the common terms associated with affiliate marketing:

Affiliates: Publishers like you and me who are using affiliate program links to promote and make sales.

Affiliate marketplace: There are many marketplaces like Shareasale, CJ and Clickbank, which work as central databases for affiliate programs in different niches.

Affiliate software: Software used by companies to create an affiliate program for their product, for example: iDevaffiliate.

Affiliate link: Special tracking link offered by your affiliate program to track the progress of your affiliate promotion.

Affiliate ID: Similar to the affiliate link, but many affiliate programs offer a unique ID which you can add to any page of the product site.

Payment mode: Different affiliate programs offer different methods of payment. For example: check, wire transfer, Paypal and many more.

Affiliate Manager/OPM: Many companies have dedicated affiliate managers to help publishers to earn more by giving them optimization tips.

Commission percentage/amount: The amount or percentage you will be receiving in affiliate income from every sale.

2-tier affiliate marketing: This is a great way of making money from an affiliate program. With this method you recommend that others join affiliate programs, and you receive a commission when a sub-affiliate makes a sale, (similar to MLM or multi-level marketing.) This income is popularly known as sub-affiliate commission.

Landing pages: A unique product sales or demo page used for the purpose of increasing sales. Most of the programs that you will be promoting have many landing pages, and you can run A/B testing to see which pages convert best for you.

Custom affiliate income/ account: Unlike a generic affiliate account, many companies offer custom affiliate income to people making the most affiliate sales for them.

Link clocking: Most of the affiliate tracking links are ugly. Using a link clocking technique like URL shorteners, Thirsty Affiliates, etc., you can turn ugly links into links that can be read and understood by your readers.

Custom coupons: Many programs allow affiliates to create custom coupons which are also used to track sales. Custom discount coupons help you to increase affiliate sales as well.

Who can be an affiliate?

Any person or company who owns a website from which they can send traffic via links (banners or text links) to the advertiser’s website could be an affiliate. In addition to the above, an affiliate can also be anyone who sends users to the advertiser’s website via Pay per Click (PPC) campaigns the affiliate has created, on Google, Facebook and other search engines. The rise in popularity of social media websites like Facebook and Twitter has created another type of affiliate, who sends traffic to advertisers via their social media profiles and pages.

Affiliates send traffic to advertisers in order to receive a pre-agreed sum of money or level of commission, if the users they have sent perform the agreed action (usually a sale). The simplicity of the affiliate model means that anyone can become an affiliate, from a price comparison website, to a content site, a forum or even a blog.

Who can be an advertiser?

Any company owning a website where users can perform some sort of transaction could be an advertiser. Most of the times, this transaction refers to an order/sale, in which case the advertiser has an e-commerce website (e-shop), but it can also refer to other actions like the completion of an order form, sign up to the newsletter, catalogue request etc.