Affiliate marketing can be defined as a widespread method of promotion in which an affiliate is rewarded for every view, sale, and/or registration produced through the affiliate’s efforts (depending on the type of affiliate program).It’s similar to collecting commissions as a typical salesperson would. The more the affiliate sells… the more the affiliate gets paid. It’s as simple as that!Compensation calculations vary but are typcially based on one of the following:Pay-Per-Click (PPC) – a specific amount is paid for each visiter the affiliate sendsPay-Per-Lead (PPL) – where the affiliate is paid for registrations or sign-upsPay-Per-Sale (PPS) – a specific commission per sale is paid to the affiliateIf your goal is to generate your entire income online you can drive traffic from your subscriber lists, your websites, and from other marketing methods to affiliate links.What About Product Sales and Marketing?You’ll want to watch for great products and services with the potential to benefit your niche market and your mailing lists. To build trust and income, it’s best to recommend only those products that will be of specific interest to them. It’s a win-win situation for everyone that way.When an affiliate is marketing any product, the cost of marketing the product is absorbed by the affiliate, so it’s important to keep that cost in mind when promoting products. Typically the higher the percentage of affiliate commissions possible from any quality product, the more that product is worth promoting.When a product is sold through the affiliate’s personal link, depending on the service used, the total sale is divided up among the vendor, the affiliate, the taxing authority, the shipper (if any), and the payment processor.It is common and expected that all affiliate details be spelled out in the affiliate sign-up process. However, you shouldn’t be afraid to contact any vendor to clarify their affiliate program if you have questions. Often you can telephone or email for a fast reply. If they are not willing to answer your questions then you should stay away from them. There are plenty of other quality affiliates programs that would love to have you!Is a Digital Lifestyle for Me?Many standard retailers offer very small commissions for affiliate sales while most internet marketers offer around 50%-75% of the sale for being an affiliate of their digitial product. This is why being an affiliate of digital products can be very lucrative in a relatively short period of time.Although the number of affiliate programs for tangible goods and off-line services is rising, a completely digital lifestyle can be developed solely from digital or downloadable affiliate products that may never take physical form.Of course it’s important to note that as an affiliate of any tangible product, you generally never do more than promote a link to the product online. So in that sense it’s basically the same as a digital product.One of the best places to find digital products to affiliate with is ClickBank.com. They have an automatic affiliate program built into their payment processing service so that affiliate payments are not left up to the product owner to process.Three other good affiliate programs to check into are:CJ.com (Commission Junction)Amazon.comLinkShare.comStaying with reputable, well-known internet vendors makes a great deal of sense because you know you will get paid, you know when to expect a check or bank deposit, and you can see your account details online at any time. Plus, if you do have a problem they are more than willing to take care of it.How Do I Get Started?There are many ways to start with affiliate marketing, but a basic starting point is to have a web site with text or image affiliate links to products you want to promote. Generally you want to stay focused within a niche or interest group to increase your sales potential. In other words, you don’t want to have many different affiliate links to variety of completely different markets on your website. Stick to a similar theme.If you have used the products, your promotional efforts could include a product review based on your own experience along with images and other supporting information.Developing an email opt-in list is helpful in affiliate marketing because it gives you the opportunity to find the products and information with the most potential benefit for a group of like-minded individuals (your subscribers) and tell them about it. A targeted list of subscribers, that you have built a good relationship with could be worth thousands of dollars over time.By promoting affiliate products to several targeted niche markets, it is possible to create a substantial income over time. Especially when the affiliate marketer is only promoting quality products with a real potential to benefit customers within the niche.In conclusion, affiliate marketing is a great way to build an income without having a product of your own, and without having to do much more than get interested people to view product information through your affiliate links. It’s very easy to get started and can eventually put a lot of money in your pocket. But be prepared to put in a lot of time and effort. Making money online through affiliate programs is not easy. If it was everyone would be rich.
The Internet has changed the way we do business as much as it’s changed so many other things about our culture. What began with a military computer networking scheme that developed into ARPANET, which connected a number of universities around the United States, has turned to a necessity for both individuals and businesses across the globe. This has led to a revolution in how business is conducted. In fact, few, if any, business functions today are not in some way informed by the Internet and that is especially true in the realm of sales and marketing. When you think about online marketing, what comes to mind? Search engine optimization or e-mail marketing are probably at the top of the list, but there is something else in the marketing arsenal that you may be overlooking: Affiliate marketing.How Affiliate Marketing WorksAt its most elementary level, affiliate marketing is a fairly simple and straightforward affair in which one business partners with another, placing an ad link on the second company’s website and paying that company for every sale that a visitor sent over from that affiliate site makes on the seller’s site.It is a solid, reciprocal relationship. The affiliate drives customers to the seller and the seller pays the affiliate for the traffic. This type of business arrangement, where the seller pays a commission for sales leads, is referred to as revenue sharing, and has been around in one form or another for as long as large scale sales efforts have existed. It entered the world of ecommerce the same way that so many other innovations have, through the adult entertainment industry. However, while it may have begun with a company called Cybererotica, by 1994 the concept had spread into the Internet mainstream with a music company called CDNow and its BuyWeb Program.It began, as all such ideas, as the solution to a business need. Geffen Records wanted to market its music directly to consumers over the Internet but didn’t want to actually do the job itself. CDNow developed a program that would directly link an artist’s page on CDNow’s site to the artist’s music page on the Geffen website. It didn’t take long to catch on with other Internet-based companies.Amazon launched its own pay-per-action affiliate program in 1996. If a visitor to the affiliate followed the link to Amazon and bought a book, then that affiliate received a commission. Amazon may not have been the first on the wagon with this idea, but they were certainly the best. Their program became the model for affiliate programs everywhere and in 2000 they were awarded a patent (6,029,141) on all of the most important parts that go into an affiliate program.The rise of Web 2.0, with the improved communications it allows, as well as blogging and the development of interactive online communities and social networking sites have changed the way affiliate marketing is conducted and have made it much harder for the criminal (or merely the unscrupulous) to make money. Today, affiliate marketing has grown into a massive industry with many new and novel types of affiliate arrangements.Managing an Affiliate ProgramTaking an affiliate program from concept to completion requires knowledge of the audience you are trying to reach, a proper budget and, most of all, the right choice of program (or programs) and compensation package to fit your needs.Know your AudienceAny first year marketing student will tell you that you have to know your audience before you reach them. If you are selling a product that will appeal to a mass market, such as music or electronics, then you want a broad presence that will be seen by many people. If, on the other hand, you sell medical supplies or some other niche item, you will want to target your advertising more carefully, concentrating on the people most likely to be interested in your products and services.Setting a BudgetAffiliate advertising is, usually, a pay-per-action (also known as a cost-per-action or CPA) affair. In other words, something that you and your affiliate have made an agreement about happens, such as an ad link being clicked and a sale being made, and you owe that affiliate money. This is different from pay-per-click (also known as a cost-per-click or CPC) arrangements where payment is made for each click on the ad. That means, whether or not you convert that click into a sale, the affiliate gets paid. This is in stark contrast to display ads where you pay once and the more customers respond the cheaper the ad (in terms of cost per customer). Because of this, it is important to be able to set an advertising budget-especially for pay-per-click arrangements-large enough to pay for the number of expected clicks or actions, regardless of the number of sales that result.Types of Affiliate ProgramsWhile there are no real industry-wide standards for categorizing affiliate marketing sites, the following is a basic list of the types of sites that are used by affiliate marketers:
Click-per-action networks are affiliates that expose their advertisers to their own network of affiliates (also known as top-tier affiliates)
Search affiliates that use pay-per-click search engines to promote advertiser offers
Co-registration affiliates that include offers from other companies during the registration process for their own website
Blogs and RSS feeds
Email list affiliates
Comparison shopping and directory sites
Loyalty sites that provide some kind of reward system for purchases
Coupon and rebate sites
Content, niche and product review sites
Getting Paid: How compensation worksYou are paid by your customers, your affiliates are paid by you, but how? There are a number of different compensation schemes and either you or your affiliate will have a preference for one or another. In some cases the issue is negotiable, in others it is not. The various compensation schemes are:
Revenue sharing, also called “cost-per-sale” (CPS) is the compensation method of choice today, accounting for 80% of all affiliate programs today.
Cost-per-action (CPA) is the second most prevalent scheme in use today, accounting for another 19% of affiliate programs.
Other methods such as cost-per-click (CPC), where the advertiser pays for each click, and cost-per-mille (CPM), where the advertiser pays for every 1000 ad views, come in at 1% of affiliate programs. The use of these methods declined over the years for a variety of reasons that included the necessity to pay even though the ad failed to produce sales and, in the case of cost-per-click, fraud. These methods are, however, still used extensively in display advertisement and paid search programs.
CPS and CPA schemes have higher expectations before a commission check is issued to the affiliate. In fact, as the names imply, the customer has to buy something. Only then will the affiliate receive payment. In this arrangement the advertiser and the affiliate share the risk of the venture. It is from this model that affiliate marketing gets its other name, “performance marketing.” To make it under these rules, the affiliate must send only the best leads since it is only after a sale is made that the advertiser will reward the affiliate.Multilevel ProgramsWhile the vast majority of affiliate programs are simple, one-tier affairs, it can go beyond that. Such programs fall under the heading of multi-tier marketing: An advertiser makes an agreement with an affiliate. This is the “top-tier” affiliate. That affiliate then attracts other affiliates and the deal moves down to them. Our top-tier affiliate is paid at the agreed upon rate and gets a commission on everything that the “second-tier” affiliates bring in. Any referral program that develops beyond these initial two levels is considered a multilevel marketing or network marketing scheme. Given the terrible reputation these businesses have, it is wise to simply avoid them completely.Finding AffiliatesIt is not difficult to find affiliates. In fact, almost any website could be recruited as an affiliate. Bear in mind that high traffic websites will likely prefer CPM or CPC deals because these have a lower risk than CPA or revenue sharing. Some places to look while recruiting include:
Affiliate networks that already have a number of advertisers. These networks normally have a large number of potential affiliates for your company.
Sites that are relevant for the same audience that the advertiser is trying to reach. As long as the potential affiliate’s site is not in direct competition with the advertiser, it can work.
Vendors or existing customers could be recruited as long as doing so doesn’t pose any legal or regulatory issues.
Affiliate program directories
Pros and ConsThe cost-per-sale model makes affiliate advertising very popular since you only pay for results. The biggest con regarding this method of marketing is history itself. Spam, adware, spamdexing, trademark bidding, pay-per-click fraud and a number of other issues have given this kind of marketing a bad name over the years. These troubles, however, are becoming less and less prevalent due to advances in technology and better methodologies for dealing with them. This, coupled with the way one only needs to pay for results, leaves affiliate marketing as a strong way to reach the audience you are looking for.
There are thousands of affiliate programs offering wide range of benefits to their affiliates. However, many of these programs and the claims they make are not to be trusted. Good affiliate programs provide tremendous earning opportunities, but they need to be evaluated to distinguish them from doubtful ones. There are several factors to consider before someone decides to join any affiliate program.Products: Organizations which operate affiliate programs generally have some products to sell. These products can be in form of physical products, e-products or services. It is important to ascertain that the organization has some products to sell and that it recruits affiliates to help them in running their business. One should be very careful with any organization that has recruitment of affiliates as their main business. It is best to avoid such organizations because their affiliate structure is like a house of cards which can crumble at slightest impact.The organizations which have products to sell and market them through affiliate programs cut down on the cost of advertising and distribution. This amounts to considerable savings which they share with their affiliates. If a new affiliate is already familiar with the products, this can be helpful but this is not a necessary pre-condition to join affiliate program. New affiliates can learn about the products quite fast.Organization’s Track Record : It is not difficult to find out about the organization before joining it affiliate program. Search engines are one of the sources which can be used for this purpose. Verifying the testimonials presented by the organization is another source of information. The organization should have proven track record of operating their programs for several years successfully. If the organization is new or just starting, the person starting the program should be well known with good credibility. This is precaution against joining organizations which promise get-rich-quick scheme and then disappear.Support Available to Affiliates : Most of the new affiliates joining any affiliate program are new to the field of marketing on the internet. They need guidance and support for promoting their business and earning money for themselves. It is in the interest of the organization to help their affiliates to succeed. These organizations are in their business for considerable longer time than the affiliates, are more knowledgeable about their market and about the ways of promoting their products. They are in best position to provide their affiliates with proper guidance. Many organizations have excellent support system by way of trainings, tutorials, articles, books, marketing plans, marketing tools, forums just to name a few. These are generally available from websites accessible to the affiliates.Apart form the promotional material and information available from the website, personal guidance can be vital. A new affiliate may not be familiar with all the resources available and will look for mentoring at least in initial stages. It should be remembered by the affiliate that her success will add to the success of the organization, the organization is obliged to help her.Payment : Another factor to consider is the mode and frequency of payment to the affiliates. The affiliate should make sure that this suits her. Just to give an example – many organizations make payments through PayPal, but PayPal does not transmit money to all the countries. Such details should be checked before putting time and effort for any affiliate program.Affiliate Structure : There are many different ways in which organizations build up their affiliate structure. Many organizations have single tier structure in which affiliate is only paid commission for sale. Other affiliate structures are 2-level or multi-level deep in which the affiliate earns also from the efforts of personally sponsored members. In turn, the affiliate is expected to help her sponsored members to earn for themselves. This is one great feature of multi-level marketing leading to leveraged earning. You can read my article on leveraged earning at this URL :http://www.sanjay-j.com/artlever.htmlThere are still more variations in the structure. Some organizations allow a limited number of affiliates directly under each affiliate. There is no “ideal” affiliate structure. But it is important to have clarity in the structure and the affiliate should understand the structure.Compensation Plan : There is lot of variation in compensation plans starting from simple commission to more elaborate plan in which affiliates additionally earn through the efforts of their sponsored downline members and also from a common pool. I personally favor plans which have provision for leveraged earnings where teamwork really counts. Residual earning is another attractive feature of affiliate marketing which can build into sizeable income over a period of time. I am not against any compensation plan so long as it is understandable and appears reasonable. You have perhaps noticed that I have put this factor as the last consideration. However it is an important consideration after all other considerations are found acceptable.Persistence Pays – It takes time to build up business with any affiliate program, no matter how good the program appears. After joining any affiliate program after thorough evaluation, one needs to stay with the program giving it time to build the earning. Get-rich-quick scheme do work some times but they are rare exception rather than the rule and cannot be depended upon.This small slogan should be ingrained in the thinking when someone joins an affiliate program:PERSISTENCE PAYS.
One of the most popular methods of web site marketing is called Affiliate Marketing. Affiliate marketing is a method of paying “affiliates,” who are basically online sales people earning commissions based on sales from their referrals. Commissions are usually a percentage of the referred sale, but may include pay per click or a set dollar amount per referral. Once an affiliate signs up, they place some form of advertisement on their site. An example of this process follows.A music review site applies for the Apple iTunes affiliate program, which pays a 5% commission on referred sales. Once approved, Apple gives the new affiliate a special URL to use that includes their affiliate code. The music review site places some text, maybe some graphics and banners, in their site that links to the iTunes site with their URL. Apple site uses the special URL/affiliate code to track sales that are referred by the music review site, and sends monthly checks to the affiliate for 5% of those sales.Examples of highly successful affiliate programs to look at and learn from are Amazon.com, eBay.com, and Tigerdirect.com.Becoming an affiliate is easy. There are thousands of programs available. Beginning your own affiliate program at your site is more difficult. Done right, your affiliate program can boost sales many times over, or even become your sole source of sales. Done poorly, and you can waste a lot of time. It is worth studying, preparing and even hiring help to do it right.Affiliate Marketing requires a serious commitment. Affiliates are basically an independent sales staff that uses their site to sell your products and services, and, most likely, other products and services as well. As sales people, they need ongoing sales management. This could be in the form of e-newsletters, personal e-mails, telephone contact, being available to answer questions, providing training and advice, creating incentives to keep them motivated, etc. What you do for your affiliates will determine how much they prioritize your program over other programs who are competing for their attention and efforts.To set up an affiliate program, you must answer some questions:
How much are you able to pay in commissions? Keep in mind that you’ll probably want to have occasional short term incentive programs with increased payouts.
Do you want a few strong, committed affiliates who have the ability to bring a lot of traffic, or many affiliates who may each bring only a few referrals?
Will you set up your own affiliate tracking system (postaffiliatepro.com, myaffiliateprogram.com, idevaffiliate.com), or will you contract with an affiliate tracking company (shareasale.com, clixgalore.com, directtrack.com, performics.com, kowabunga.com)?
Will you manage your affiliates yourself, or hire a third party affiliate management company (team-affiliate.com, partnercentric.com cj.com, linkshare.com)?
When setting up an affiliate program, keep in mind these items:
You need an affiliate agreement that protects your rights, especially your trademark rights, and provides affiliates with the confidence that they are protected, too. The affiliate agreement is highly important in attracting professional affiliates, so give it serious attention. Look at the agreements on other affiliate programs, and hire a professional and/or a lawyer to do it right the first time.
Affiliates will only promote high conversion sites that provide superior customer service. Is your site ready to respond to affiliate referrals? Some affiliates might send an e-mail to 50,000 people and your site could get hit hard and fast. Be prepared.
Affiliates expect fast and accurate payment and solid reporting of their results. Test your software for accuracy before beginning your program. With thousands of affiliate programs available, affiliates won’t stick around if they believe they are not being properly paid.
You need to provide the proper tools for your affiliates to succeed. These might be sample text to put into their sites, product graphics, logos, banner ads, and even customization of your site for each affiliate.
Once you commit to an affiliate program, and you have your program set up, it’s time to find and recruit affiliates. There are many methods:
Place a link, or even a banner ad, on your site promoting your affiliate program. Your best affiliates might be your customers.
Look for non-competitive, related sites, especially content sites, and invite them to join your affiliate program.
Public relations – press releases to news sites, content sites and blogs in your industry.
Go to abestweb.com and purchase an announcement for $75. Be sure to look through previous announcements, as well as the responses they’ve gotten, so your announcement gets the response you want.
Look for other announcement services, such as affiliate-announce.com.
Promote with Google AdWords and Yahoo Search Marketing pay per click programs.
To learn more today about affiliate marketing, go to abestweb.com, revenuetoday.com and affiliatetip.com.