With the creation of the internet, companies or businesses have realized they have a new opportunity to market their products and services to consumers through the millions of websites available on the internet, which billions of people visit every day. The search engine has ballooned the internet into a huge e-commerce and information machine. Website owners are creating valued content and offering great benefits to their visitors. Website owners want to be compensated for their work so we see an emerging, more accountable forms of online advertising we call affiliate marketing.
Affiliate marketing is advertising on the internet whereby any business can affiliate itself with website owners, known as affiliates, using affiliate programs. Money is made by generating traffic, leads and sales for the businesses. The business can be an advertiser selling a product like clothing, electronics, airline tickets, insurance policies or car parts. And the business should be ready to pay website owners or an affiliate network of websites to help it sell and promote its products.
A website owner is an individual or company that promotes a business product or service in exchange for earning a commission. A business contractually agrees to work with a website owner, providing the website owner with creative such as banners, links or even unique phone numbers, which a website owner incorporates in their website.
The consumer is the final component that completes the affiliate relationship triangle. The product is targeted for the consumer, who sees the advertising and takes action if interested with the advertised product or service, by clicking a shown link, banner etc. from the owner’s site. We call this a conversion.
What is An Affiliate Program?
An affiliate program is a marketing program that allows you to receive a commission for helping to promote a company or business product generate sales through your website. But you deal with the parent company that provides you with all your advertising tools such as banner ads, links or tracking codes to place on your sites, emails etc. The transaction is tracked when a visitor to your site or listing clicks on an ad or link. You get paid if this transaction results in a sale for the parent company.
In other words, an affiliate program is a mechanism in which an online merchant website pays affiliate websites a commission to send them traffic. An affiliate website posts links to the merchant website and the owner is paid according to the contract agreement. Payment terms on the contract are based on the quantity of traffic the affiliate website sends to the merchant’s site.
How affiliate marketing Works
Affiliate marketing works by a “cookie”, which is a technology that works with web browsers to store user information such as shopping cart contents, user preferences etc. In affiliate marketing, the cookie remembers the link or ad a visitor clicked. Other information stored by the cookie is date and time of the click, even remembering the kind of websites or content you liked most. affiliate marketing relies on a first-party cookie.
A user visits owner’s website, clicks on business/advertiser creative ad, which results to the visitor’s browser receiving the tracking cookie that identifies the business/advertiser, owner website and the specific commission amount.
How Affiliate Programs Work
Affiliate programs work by three basic affiliate program payment arrangements:
Pay-Per-Click: these are programs that allow the merchant site to pay the affiliate based on the number of visitors who have clicked on the link directing them to the merchant’s site. The visitor doesn’t have to buy anything and it doesn’t matter to the affiliate the activity the visitor did while on the site.
Pay-Per-Sale: is also called cost-per-click. A merchant pays an affiliate only if the affiliate sends traffic that translates to purchases on the merchant’s site. Amazon is an example of this affiliate program. They pay the affiliate a percentage of the sales. Others pay a fixed amount per sale.
Pay-per-Lead: Affiliates are paid according to the quantity of traffic driven that signed up as leads. Meaning, the visitor will be requested to fill out some requested information on the merchant site. This information can be used as a sales lead or can be sold to another company as a sales lead.
Other Variations on These Basic Payment Plans
A merchant can set up an affiliate program based on any action that would benefit them. Quantity traffic also play a role in affiliate marketing. Therefore, every affiliates they are paid according to the quantity of traffic by doing it.
Residual Programs: an affiliate makes money based on traffic driven that continues to make purchases on the merchant’s site
Two-tier programs: these are affiliate programs with structures resembling those of multilevel marketing organizations, or network marketing. Commissions are received based on sales as well as clicks or leads coming from affiliate sites. Commission is also received based on the activity on affiliate sites that translates to the merchant site.
Affiliate Marketing for Dummies
Affiliate marketing is not for those who just want to try their hand at it because they heard about it somewhere on the internet that it will make millions for them overnight. affiliate marketing actually requires skills and it takes time to build your skills as a dummy affiliate marketer. Affiliate marketing for dummies is for those who really want to learn a new skill that can possibly enable them to make a career out of affiliate marketing. Remember, the key here is that it will take time to learn and master.