What Is Affiliate Marketing ?
Affiliate Marketing is a membership based marketing. You sign-up with an online merchant and then promote his products on your website. According to the various models of affiliate marketing,you will be paid when certain actions are performed by a visitor in your website. The main players in this business model are the merchant,the affiliate and the customer.
The merchant or retailer is someone who has a product to sell. They would be having their own website promoting their products. To widen their reach they allow publishers(web/blog owners who advertise) to promote their products. After signing up the publisher becomes an affiliate of the merchant and is given an affiliate code. The affiliate that places advertisements with the code embedded on his website to attact customers for the merchant. When the affiliate is successful in bringing a customer to the merchant,the merchant than pays the affiliate an agreed sum of money. In general this is how the model works.
In more detail,there are 3 main ways affiliates can be paid from their advertisements on their site:-
Pay Per Click
When a visitor clicks on any of the advertisements placed by the affiliate,the affiliate gets paid. Google AdSense is a good example of this where the money earned for each click by your visitor is deposited into your AdSense account. Since it is relatively easier to get a visitor to click on one of your ads compared to the Pay Per Sale model,your commission is usually small and your money is made in quantity.
Pay Per Sale
In Pay Per Sale an affiliate is paid when a visitor clicks on an advertisement and then proceeds to purchase that particular product. The commission for Pay Per Sale is normally a percentage of the purchase price. Merchants offer anywhere in between 5% up to 60% or even more for each sale. Apart from directing the visitor the affiliate plays no part in the product’s purchase or delivery process which is handled by the merchant.
Normally when the visitor clicks on an advertisement a link is established between the customer,affiliate and merchant using the affiliate code. This link is known as a ‘cookie’and will remain there for a specified time and even when the customer leaves the merchant’s site but purchases the product at a later within a specified time,the cookie will allow the merchant to trace the purchace back to the affiliate and ensures that the affiliate gets paid the respective commision.
The cookie expiry time differs from merchant to merchant. Good affiliate programs will allow the cookie to track the customer forever but unfortunately some merchants apply a time stamp of 30,90 or 120 days on the cookie tracker. Normally customers do not buy on their first or second time of seeing a product. Customers usually look around in the internet before making a decision and sometimes they will only be ready to make the purchase after months. Therefore when choosing your affiliate program make sure to pay attention to the cookie time period given by the merchant.
Pay Per Lead
A lead is information about a visitor on your site that you can use to get in touch with him/her at a later time,in the hope of converting them into buyers. The Pay Per Lead model is where the affiliate helps the merchant get this contact information from a visitor.
How it is done is again by becoming an affiliate and placing links on your website that would direct the visitor to a particular sign-up page when he/she clicks on it. If the customer then fills up the form and registers with the merchant,a sum of money is deposited into the affiliate’s account by the merchant.
Leads are very important as they are future customers. With the information the merchant will decide what type of advertisement to forward to this client. The merchant is also able to continuously send advertisement material to the client as long as he/she is signed up. Most of the time when a client become a buyer they will also become a repeat-buyer and that is why merchants are willing to pay for leads.
Affiliate Marketing Risks
When you advertise a product on your site that doesn’t belong to you,it is always good to do some research on the product and also the merchant or retailer especially if you plan to promote the product as one of the best in the market and put your name to it. Unreliable products or bad transaction experiences can damage your relationship with your readers. It is therefore important how you promote your affiliate products.
It is also possible to label your affiliate advertisements as advertisements per se so that you are not tied too tightly to them. It is not worth losing your readers especially if they have been hard earned.
General Info
Blogs are normally a good platform for affiliate marketing. The reason being the personal relationship that the blogger has with his/her readers. The readers tend to form a bond based on trust with the blogger which makes it easier for the blogger to promote particular products.
Affiliate marketing doesn’t work for all products. There are not many Affiliate Programs for instance on tattoos. There is also the problem that your blog might attract readers who don’t really have the buying power such as teenagers and lastly the Affiliate program might not be in line with your blog or site and therefore not hold any interest for your readers.
Research should also be done on the credibility of the merchant. Some fly-by-night merchants have been known to close-up and completely disappear after making a sales hit to avoid paying commissions. They go on to open up a new site under a different name.
Of course as with any type of business model there is alot to learn before becoming successful in it. It is always good to learn as much as you can to avoid making costly mistakes especially in terms of invested time. Affiliate marketing is not easy money as some site owners think. Even if you know everything there is to know about it,getting loads of traffic is an indispensable issue to Affiliate Marketing.
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