What is Affiliate Marketing?
Affiliate Marketing is a widespread method of promoting a website, in which an affiliate is rewarded for every visitor, subscriber and/or customer provided through the affiliate’s efforts. Compensation may be made based on a certain value for each visit (Pay-per-click), registrant (Pay-per-lead), or a commission for each customer or sale (Pay-per-Sale). Eighty percent of affiliate programs today use revenue sharing or cost per sale (CPS) as a compensation method. Affiliate marketing is also called “performance marketing”, in reference to how sales employees are typically being compensated.
The Origin of Affiliate Marketing:
The concept of revenue sharing—paying commission for referred business—predates affiliate marketing and the Internet. The translation of the revenue share principles to mainstream e-commerce happened in November 1994, almost four years after the origination of the World Wide Web.
Affiliate Historic Development, Web 2.0 & Beyond:
Affiliate marketing has grown quickly since its inception. The e-commerce website, viewed as a marketing toy in the early days of the Internet, became an integrated part of the overall business plan and in some cases grew to be a bigger business than the existing offline business. Websites and services based on Web 2.0 concepts—blogging and interactive online communities, for example—have impacted the affiliate marketing world as well. The new media allowed merchants to become closer to their affiliates and improved the communication between them.
Here is a sample scenario to illustrate how our affiliate program works.
- Create your website.
- Join the Linkshare affiliate network.
- Select & apply for the BN program through Linkshare.
- Once approved in the BN program, place the BN tracking link on your website. These links contain your affiliate ID so we know who gets the commission for any sales.
- When your “surfer” or site user clicks on the link on your Web site (this is called “Click Through”), a cookie is placed on their computer. If a purchase is made on BN.com by this computer within the duration of the merchant cookie, then you get a commission!
- The merchant link has a tracking pixel/image (1 pixel by 1 pixel) next to it on the page that will register every time the ad is displayed. This will help you to know how many times an ad has been viewed. Statistics are everything in the affiliate game!
What is Merchant Affiliate Program?
A marketing program is where a Web merchant such as Barnes & Noble.com recruits third party sites to place the merchant’s banner ads, text ads, or product ads to drive traffic to the merchant’s site. In return for driving traffic, third party sites (affiliates) are awarded a referral fee or commission from sales generated from the affiliate link . The most common type of affiliate programs is pay-per-sale. There are two primary ways to locate affiliate programs for a target website:
- Signing up with an Affiliate Program Network – Large affiliate networks that provide the platform for dozens or even hundreds of advertisers.
- Websites that offer an affiliate program often have a link titled “affiliate program”, “affiliates”, “referral program”, or “webmasters”—usually in the footer or “About” section of the website.
Types of affiliate websites:
Affiliate websites are often categorized by merchants (i.e., advertisers) and affiliate networks. There are currently no industry-wide accepted standards for the categorization. The following types of websites are generic, yet are commonly understood and used by affiliate marketers.
- Search affiliates that utilize pay per click search engines to promote the advertisers’ offers (i.e., search arbitrage)
- Comparison shopping websites and directories
- Loyalty websites, typically characterized by providing a reward system for purchases via points back or cash back
- CRM sites that offer charitable donations
- Coupon and rebate websites that focus on sales promotions
- Content and niche market websites, including product review sites
- Personal websites
- Weblogs and website syndication feeds
- E-mail list affiliates (i.e., owners of large opt-in -mail lists that typically employ e-mail drip marketing) and newsletter list affiliates, which are typically more content-heavy
- Registration path or co-registration affiliates who include offers from other merchants during the registration process on their own website
- Shopping directories that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updates
- Cost per action networks (i.e., top-tier affiliates) that expose offers from the advertiser with which they are affiliated to their own network of affiliates
- Websites using adbars (e.g. Adsense) to display context-sensitive, highly relevant ads for products on the site
- Virtual Currency: a new type of publisher that utilizes the social media space to couple an advertiser’s offer with a handout of “virtual currency” in a game or virtual platform.
- Video Blog: Video content that allows viewers to click on and purchase products related to the video’s subject.
- File-Sharing: Web sites that host directories of music, movies, games and other software. Users upload content (usually in violation of copyright) to file-hosting sites, and then post descriptions of the material and their download links on directory sites. Uploaders are paid by the file-hosting sites based on the number of times their files are downloaded. The file-hosting sites sell premium download access to the files to the general public. The web sites that host the directory services sell advertising and do not host the files themselves.
Affiliate Marketing Acronyms:
Here is a short list of the many acronyms used by Affiliate Marketers. After a while you will get to know what they all mean – they are all important so do take a quick read through….
- ABestWeb – The Internet’s Leading Affiliate Marketing Forum!
- Business to Business.
- Business to Consumer.
- Average pay out per hundred clicks.
- Earning per thousand impressions.
- Conversion Ratio.
- Cost Per Action.
- Cost Per Click.
- Cost Per Lead.
- Cost Per Thousand.
- Cost Per Sale.
- Conversion Rate.
- Customer Relationship Management
- Cascading Style Sheets.
- Click Through Rate.
- Real Simple Syndication