The real step-child of online marketing is affiliate marketing, a tried and trusted method for creating sales and advertising websites or products online. Many e-commerce sites owe a great deal to affiliate marketing methods namely Amazon.com and CDNOWs WebBuy system. Affiliate marketing is a highly efficient way to create brand awareness and generate leads and business.
Some links in this article are affiliate links from which we may receive a tiny commission at no additional cost to you, should you visit a merchant via our link and subsequently make a purchase.
Affiliate marketing encourages affiliates to sell or advertise a merchants products by means of a revenue share or commission system. In the early days of the web when affiliate marketing started (about late 1994) most merchants made use of a Cost-Per-Click system (known as CPC or CPM) where an affiliate made money from every click to the merchants website generated from the affiliates site. Because of bad management and many fraudsters taking advantage of this system in various ways, only about 1% of affiliate marketing is now done this way. 80% of affiliate marketing is now on a cost-per-sale basis, where the affiliate receives commission for every actual SALE generated on the merchants site that is due to a referral from the affiliate and the last 19% of affiliate marketing is on a cost-per-action basis, where the affiliate receives a revenue-share if the person referred from their site actually subscribes or registers with the merchants website.
Affiliate marketing is done through different types of techniques or publisher websites – blogs and RSS feeds becoming quite a predominant method, as well as shopping and comparison websites, loyalty websites and others.
Affiliate marketing involves the use of affiliate management companies, in-house affiliate managers, and third party vendors, who use e-mail Marketing, Search Engine Marketing and RRS Capturing and Display Advertising, to ensure the success of the product. Web traffic, being critical to online marketing, can be traced with the help of a third party or own affiliate programs. Yes, this process requires a lot of effort. When it first started, this method involved a lot of spamming, false advertising, trademark infringement, etc. With the invention of complex algorithms and enhanced security that make it safer for doing business online, affiliate marketing became more popular as it offered more opportunities. However, at the same time, affiliate marketing has also increased the competition in marketing.
Such pressure led to the introduction of out-sourced programs. These services are offered by companies with expert affiliate and network program managers, who have various affiliate program management techniques. In addition, these affiliate networks also have association with publishers to help them on the advertising aspect.
When was affiliate marketing started? It was started by cdnow.com that had websites related at music. A list of music albums can be found on the website. One is paid if he put those links in his website and a visitor bought an album through his site. Shortly thereafter, a woman approached Amazon with a similar marketing strategy. The woman would sell Amazons books on her website and she would be paid a certain percentage in return if she sold Amazons books through her site. This triggered the Amazons associate program.
Affiliate network started to gain popularity and has since been adopted by different businesses, such as travel, education, telecom, retail and subscription sites, just to name a few.
The compensation methods vary from one affiliate program to another. Amongst the methods, we have the Cost per Sale (CPS), Cost per action (CPA), Cost per mile (CPM) and Cost per click (CPC). The CPS and CPA are most commonly used today. In CPM and CPC, the advertiser may not capture the target audience as a click would be enough to generate commission. On the other hand, for CPS and CPA, the visitor has to click the link and buy something or sign up for some services, which proves that he is among the target audience, before the affiliate is being paid. What is important here is to send as much targeted traffic as possible to the advertiser in order to increase his returns. Therefore, affiliate marketing is also known as performance marketing because the success of the product really depends on the performance of the affiliate. Is there a difference between an affiliate team and a sales team? Yes, from the nature of the job! It is the job of an affiliate team to generate traffic, and it is the job of the sales team to follow on from there, to influence the visitor to buy the product.
Affiliate marketing is very effective and many businesses have shared and attributed their successes to this method of marketing.
No comments:
Post a Comment