Affiliate Marketing
Affiliate Marketing is a derivative of Internet Marketing
where the advertisement publisher gets paid for every customer or sales
provided by him.
Basic Approach
Affiliate Marketing is the basic approach for all
other Internet Marketing Strategies. With this form of marketing,
affiliate management companies, in-house affiliate managers and third party
vendors are effectively utilized to use of:
·
E-mail Marketing,
·
Search Engine Marketing,
·
RRS Capturing. and
·
Display Advertising
Web Traffic
The Web Traffic can be traced with
the help of a third party or own Affiliate Programs. A lot of work is involved
in this process. The invention of complex algorithms and advance security have
made it safer for doing business and shopping online. This even led to the
better scrutinizing of the terms and conditions by the merchants.
More Opportunities = More Competition
Affiliate Marketing became more profitable
with the opening of more opportunities but at the same time it also increased
the competition in marketing.
High-Level Marketing Skills Invested
Due to this pressure in-house Affiliate Programs for
merchants became a thing of the past and were replaced by out-sourced programs.
The companies that offered this service have expert Affiliate and Network Program
Managers who have various Affiliate Program Management techniques. These Affiliate Networks have publishers
associated with them who help them with the advertising part.
Origin
Affiliate Marketing was started by www.cdnow.com who had music oriented websites.
They placed list of music albums on their site and they paid others if they put
those links in their websites when a visitor bought their album through their
site. The first company to link with www.cdnow.com
was Geffen Records.
Two months later, Amazon was offered by a woman that
she would sell Amazon’s books on her website and she should be paid a certain
percentage in return if she sold Amazon’s books through her site. They liked
the idea and started the Amazon Associates Program. It was more of a commission
program where they received a commission if a visitor clicked their links and
banners on other’s site and bought anything through it.
Growth
Since its invention, the Affiliate Network has been
adopted by various businesses like travel, education, telecom, mobile, gaming,
personal finance, retail, and subscription sites, the most common being adult
and gambling sectors.
Compensation
The Compensation Methods used are:
- Cost
per Sale (CPS);
- Cost
per Action (CPA);
- Cost
per Mile (CPM); and
- Cost
per Click (CPC).
The first two are the more famous methods today. This
is because in CPM and CPC, the visitor which turns up on a particular website
might not be the targeted audience and a click would be enough to generate
commission. CPS and CPA have a compulsion that the visitor not
only clicks on the link but also buys something or signs up for some service
after it which proves that he is among the targeted audience. Only in the above case the Affiliate gets paid. So the
Affiliate should try to send as much Targeted Traffic as possible to the
advertiser in order to increase his/her returns.
Affiliate Marketing = Performance Marketing
For this reason Affiliate Marketing
is also known as Performance Marketing because it totally depends on the
performance of the Affiliate. The Affiliate Team can be differentiated from a
sales team from the nature of their jobs. The job of the Affiliate Team is to
drag Targeted Traffic to a point and from that point it’s the job of the sales
team to influence the visitor to buy the product or the service.
This is a very effective kind of method because the
money is being paid only 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.
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