Monday, March 9, 2009
Thinking Affiliate marketing
Affiliate Marketing is a way of promoting online business through affiliate programs and advertising that pay the affiliate (or publisher) a type of commission based on the amount of business their website brings the merchant company.
It’s a form of revenue sharing or commission based advertising. The term “affiliate marketing,” however, is often associated with network marketing or multi-level marketing and therefore many companies prefer to use the term “performance marketing”. Affiliate marketing is the most cost effective sort of marketing there is, and is actually incredibly efficient. For this reason, many companies (especially those that started in the early days of e-commerce) owe a tremendous amount to affiliate marketing (amazon.com is a good example) and it has now become normal for companies to include affiliate marketing in many of their plans.
There are three types of compensation methods that are associated with affiliated marketing. The first type is Cost per Click (CPC) or Cost per Mil (CPM.) Basically, the affiliate earns by how many clicks the advertising on hisher site generates, or by just having the advert published on the website. But because of click fraud and many other questionable tactics, CPC is no longer the general form used for affiliate marketing. Generally, companies now either use CPA (Cost per Action) or CPS (Cost per Sale.) The first is based on how much the advert generates interest by the clicker to actually buy or register at the advertised site, the second is based strictly on sales. In other words, an affiliate is paid if the clicker actually purchases something on the advertised site.
Online merchants find affiliate marketing highly advantageous due to the fact that it presents little to no risk both for the merchant and the ‘affiliate.’
Affiliate marketing also bears no cost on the merchant in the original set-up – in other words, it costs nothing to place advertising banners on affiliate’s sites, and there is only a cost if a lead or sale has been generated (which is advantageous for all.) Merchants also get to set the parameters, and decide on the incentive schemes. Thus, it is a very inexpensive (but highly efficient way) to grow a business.
Affiliate marketing is not limited to only display-adverts on an affiliate site, but also comes in the form of email, blogs, rss feeds, content and niche sites, loyalty sites, comparison sites or shopping directories, and other forms.
It’s a form of revenue sharing or commission based advertising. The term “affiliate marketing,” however, is often associated with network marketing or multi-level marketing and therefore many companies prefer to use the term “performance marketing”. Affiliate marketing is the most cost effective sort of marketing there is, and is actually incredibly efficient. For this reason, many companies (especially those that started in the early days of e-commerce) owe a tremendous amount to affiliate marketing (amazon.com is a good example) and it has now become normal for companies to include affiliate marketing in many of their plans.
There are three types of compensation methods that are associated with affiliated marketing. The first type is Cost per Click (CPC) or Cost per Mil (CPM.) Basically, the affiliate earns by how many clicks the advertising on hisher site generates, or by just having the advert published on the website. But because of click fraud and many other questionable tactics, CPC is no longer the general form used for affiliate marketing. Generally, companies now either use CPA (Cost per Action) or CPS (Cost per Sale.) The first is based on how much the advert generates interest by the clicker to actually buy or register at the advertised site, the second is based strictly on sales. In other words, an affiliate is paid if the clicker actually purchases something on the advertised site.
Online merchants find affiliate marketing highly advantageous due to the fact that it presents little to no risk both for the merchant and the ‘affiliate.’
Affiliate marketing also bears no cost on the merchant in the original set-up – in other words, it costs nothing to place advertising banners on affiliate’s sites, and there is only a cost if a lead or sale has been generated (which is advantageous for all.) Merchants also get to set the parameters, and decide on the incentive schemes. Thus, it is a very inexpensive (but highly efficient way) to grow a business.
Affiliate marketing is not limited to only display-adverts on an affiliate site, but also comes in the form of email, blogs, rss feeds, content and niche sites, loyalty sites, comparison sites or shopping directories, and other forms.
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