What’s Affiliate Marketing?

Thursday, October 16th, 2008 at 7:43 PM by Robert Barry

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There are many descriptions with regard to affiliate marketing, yet they all have the same meaning. Affiliate marketing is now a booming business on the internet.

Basically, it is a cooperative effort between merchants and an affiliate’s website. Affiliate marketing has been proven to be a cost-efficient, measurable method of delivering long-term results. Affiliate marketing has become famous for internet sites that are trying to make some extra or additional income for their site. Every day, people get interested in affiliate marketing and want to make money from it. In many cases, these new affiliates do not fully understand the affiliate marketing world and make some costly mistakes. In other words, affiliate marketing has often been misunderstood.

One of the common misconceptions that is being associated with affiliate marketing is “selling”. Though selling is an important activity of affiliate marketing and the main function of a business operation. Another misconception is that affiliate marketing is commonly linked with “advertising”. While the importance of advertising in marketing a certain product is not to be underestimated, the fact of the matter is; advertising, like selling, is merely a part of the many functions of marketing.

In affiliate marketing, an affiliate is compensated for each visitor, subscriber and/or customer provided through his efforts. The compensation may be made based on a certain value for each visit. From the merchant’s viewpoint, the most attractive aspect of affiliate marketing is the fact that no payment is made to the affiliate until results are appreciated.

Typically, affiliate marketing is being run by affiliate networks and these affiliate networks are composed of two functional bodies, the group affiliates and the group merchants. Each group has their special function and role when it comes to affiliate marketing. The affiliate network generally acts as a third party between the merchant and the associated affiliates. The network provides the technology to deliver the merchant’s campaigns and offers. The affiliate network will also collect the commission fees from the merchants and then pays the affiliates who are part of the program.

The merchant is any web site owner who wants or desires to take advantage of performance based marketing. There are many benefits to the merchant. Primarily, the merchant maintains and operates the affiliate program. If it would be removed, the merchant needs to do their part by researching interested affiliate web sites to ensure that they are a good fit for that particular web site. Finding a good fit for their merchandise would be the key to more generated income. The merchant has access to markets and customers without spending valuable time searching them out. Banner ads on affiliate sites are not that distracting to the site user. It may produce interest for that particular product and drive the consumer to the merchants’ web site. It is also the merchant’s discretion how much he is willing to pay for each sale that results from a visitor sent from an affiliate marketer.

The affiliate or the affiliate marketer also realizes many benefits. The affiliate is a web site owner that promotes one or more merchants and their affiliate programs. Affiliate marketing can in many cases, generate a full-time income for the affiliate. But is by no means an easy task to accomplish. The affiliate needs to have a better understanding with the merchant as to what the commission will be, expected payment method and in some cases, time involved in the contract. The affiliate also has the responsibility to stand for the merchandise their user base would be most interested in. For example, if the site has a user base of mainly stay-at-home moms, then on-line job openings such as surveys would be a possible match for them. This group would also appreciate direct links to children’s products and informational sites. Merchandisers often provide targeted, best-seller items and personal support to their affiliate. Quite often, they may offer sales promotions that will benefit the merchandiser as well as the affiliate.

Affiliate marketing can be an excellent situation for both the marketer and the affiliate. If they will work together, they can be an advantage to each other. Plus, the fact that it seems to make sense, it is an easy and inexpensive way to start, and you can be up and running in a very shot time. But there is one very important fact to consider. It is: how to get traffic and make your offer different than all others. I’ll be talking about some of those methods in a future post.