An Explanation of Affiliate Marketing

Affiliate Marketing

Affiliate marketing is a method of promoting web businesses in which an affiliate is rewarded for every visitor, subscriber, customer, and/or sale provided through his/her efforts. (Seocertification.org)

YouTube is a great example to help explain affiliate marketing.  Pewdiepie is one of the most subscribed YouTubers, with over 35 million subscribers.  He began creating gaming videos and then formed a partnership with Nintendo.  He would feature Nintendo products in his videos and receive payment based on his subscription count and other various factors.  Pewdiepie became a millionaire because his partnership with Nintendo and other companies who reached out to him.  

Affiliate marketing is the most trusted way to promote any business.  Pewdiepie has a very loyal following, and these subscribers take his opinion into consideration when purchasing products. Affiliate marketing is known as a pay for performance model.  This means that the there are no marketing expenses incurred until the results are finally realized.  Compensation is usually based on these few factors:  

• Pay-per-impression or Cost-per-thousand (CPM):  The publisher of the ad gets a fixed amount for every 1000 impressions.  The ad is either rich media, or a banner image.  

• Pay-per-click (PPC)/Cost-per-click (CPC):  This is the most popular method.  The advertiser must pay a set amount of money each time a potential customer clicks on the advertiser’s ads.  Commission can be generated by fraudulent clicks however.  

• Pay-per-lead (PPL):  The advertiser must pay commission to the publisher for every visitor that was referred.  If the referred visitor performs the desired action then the publisher is paid a commission.  Examples of desired actions may be filling an online form, creating a new account, or subscribing to a newsletter.  

• Pay-per-sale (PPS) or Cost-per-sale (CPS):  Also known as revenue sharing, this method is where the a percentage of a sale is given to the publisher.  The publisher refers their visitors to the advertiser and then sales are generated.

• Pay-per-call:  This is where an advertiser pays a fixed commission to the publisher for the phone calls received from the specific published ad.  This acts as a link between online and offline advertising.  

Benefits of Affiliate Marketing

Affiliate marketing is beneficial for merchants because it allows merchants to reach a broader market.  Sales can be generated more easily this way.  Research is required to determine who to contact, finding a good fit for their product is key, so a bit of healthy research is done.  Merchants can come in contact with the market and willing customers more easily.  Especially, the customers who will drive and enhance sales.  Affiliate marketing draws in visitors of different genres, so this gives marketers an idea of consumer trends, needs, and requirements.  Fast and easy sales are another result of affiliate marketing.  These initial customers will become repeat customers and the recommendations from the publisher usually works.  

How is the affiliate marketing success tracked?

There is various software available on the market, but the most popular is Affiliate Wiz (ASP.NET). Affiliate Wiz is used to manage affiliate marketing programs.  This software places a cookie on a visitor’s computer and tracks them as they browse the website.  When sales are made, the administrator is notified.