AFFILIATE MARKETING is a performance based marketing in
which a business rewards one or more AFFILIATES (PARTNERS) for each visitor or
customer brought by the affiliate’s own marketing efforts.
The owner of the online shop and the owner of the website
sign an agreement according to which the former advertises his products on the
website of the latter and gives him commission for each sold product.
Affiliate marketing connects online merchants and
independent websites in the role of affiliates or partners. They are so called
commercial agents or sales employees for the products of certain shops.
There are 4 core players in the game:
The MERCHANT (also known as RETAILER or BRAND)
The NETWORK (that contains offers for the affiliate and
takes care of the payment)
The PUBLISHER (also known as AFFILIATE or PARTNER)
COMPENSATION METHODS
Predominant compensation methods are:
Pay per sale (PPS) - 80% of affiliate programs
Cost per action (CPA) - 19% of affiliate programs
Cost per click (CPC)
Cost per mile (CPM – cost per estimated 1000 views)
Cost per click and cost per mille are used by less than 1
percent of the traditional affiliate marketing programs. However, these methods
are used heavily in display advertising and paid search.
MULTI- TIER PROGRAMS
Some advertisers offer multi-tier programs that allocate
commission into a hierarchical network. If a publisher who has signed up for
the program attracts other publishers to do the same using his sign-up code, he
will get additional commission (at a lower rate) when other publishers perform
activities on the net.
In most affiliate programs we have one-tier programs, in the
minority of affiliate programs we have two-tier programs.
ADVANTAGES AND
DISADVANTAGES
Affiliate marketing has its advantages for the partner and
the merchant. The merchant pays commission exclusively for the sold products.
Affiliates are not employed by the merchant whose products or services they
promote.
As affiliate you can promote products of different
merchants. You are given a commission for each sale and sometimes additional
stimulus for exceeding objectives.
If you want to perform Affiliate marketing, you need
AFFILIATE PROGRAM. For offering affiliate programs you don't need to register
your own private company, the only condition for cooperation is your own
website. Joining the established affiliate programs is mostly free, but there
are also exceptions where you have to pay registration costs.
As affiliate you can freely decide upon the choice and setup
of advertisements and other ways of promotion. You can end the cooperation with
affiliate program any time without any obligation to the merchant.
The sale is registered by AFFILIATE TRACKING which is based
on cookies.
LOCATING AFFILIATE
PROGRAMS
There are 3 primary ways of locating affiliate programs for
a target website:
Affiliate program DIRECTORIES
Large affiliate NETWORKS that have platform for hundreds of
advertisers
The TARGET WEBSITE itself
THE MOST FAMOUS
COMPANIES USING AFFILIATE MARKETING
Affiliate marketing is a very popular type of marketing used
by all biggest online shops such as Amazon and eBay, it is used also in
Slovenia (EnaA.com, Life.si).
Links to some companies and networks that offer affiliate
programs:
Amazon.com - www.amazon.com
Barnesandnoble.com - www.barnesandnoble.com
MotherNature.com - www.mothernature.com
Priceline.com -www.priceline.com
LinkShare -www.linkshare.com
Commission Junction - www.cj.com
ClickXchange.com – www.clickxchange.com
Shareasale.com – www.shareashale.com
ClickBank – www.clickbank.com
Affiliatewindow
– www.affiliatewindow.com
Affiliate
Marketing Guide
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