The Affiliate Marketing is used extensively to promote web sites, and affiliates are given an award for every visitor, subscriber or client prepared through their efforts.
For this reason, affiliates are sometimes viewed as an expanded sales force for a web site. Here affiliates are paid for performance, so affiliate marketing is also referred to as performance marketing.
Affiliate Marketing: how it works:
The affiliate refers perspective users to a merchant’s web site. And some of those users perform the desired action. The merchant bonus the affiliate for each desired action resulting from the affiliate’s referral.
Action and Rewards:
The Affiliate Marketing can be used to encourage any type of web site, here just needs to be an agreed upon the action that will result in an affiliate earning a reward.
There are different types of merchants will have different required actions. The actions and the type of commission can be as:
Cost Per Action (CPA): a definite commission for a particular action.
Cost Per Lead (CPL): a definite commission for a lead or a potential sale.
Revenue Share or Cost Per Sale (CPS): an agreed percentage of the purchase amount is awarded.
Cost Per Click(CPC): CPC creates a very small part of the affiliate marketing mix, and the merchant pays a fixed amount for each click through to their web site.
The solution to affiliate marketing is being prepared to track the whole process from potential customers being sent to a web site through to completed action so that the merchant is prepared to award the right affiliate with the right commission.
So, here specialized affiliate tracking software is used to track affiliate campaigns and this is generally supplied and supported by the affiliate network. Mostly, the merchant and the affiliate will also use their own tracking software to make sure that there are no serious disparities.
Affiliates send traffic to merchants through links or URLs, and the tracking software grants each affiliate to have a unique identifier in the URL. These URL links set a cookie on the customer’s computer, which grants the software to track the sale.
Promoting Merchants by Affiliates:
Affiliates are the online seller who is paid on a fulfillment basis. The main aim of an affiliate is to send targeted traffic to a particular merchant’s web site. That means customers who are very likely to perform the desired action.
The main types of affiliates merchant’s web site:
Personal web sites
Content and niche sites
Loyalty sites (offers cash back or point)
Coupon and promotions sites
Comparison shopping ( PPC advertising)
Search affiliates (search arbitrage)
Here content and niche sites are web sites created especially around a topic, and any products promoted will carry affiliate tracking. Now some affiliates manage major opt-in email lists, and they market distinctive merchant proposal through their email newsletters.
The most successful affiliate marketers are those who promote various merchants through paid search, Pay Per Click advertising on search engines.
As these affiliates try to find the highest Earnings Per Click for the lowest Cost Per Click, this is also directed to as search arbitrage.
Affiliate networks officer tracking solutions, detail on programs to both affiliates and merchants, hosting of creative banners, broking payment options, and support to both affiliates and merchants.
Affiliate networks have numerous affiliates and numerous merchants signed up to them, so they are an ultimate source for recruiting affiliates if you are a merchant, or for finding merchants to promote if you are an affiliate.
Affiliate networks function as an entrance between merchants and affiliates. Affiliate networks generally charge the affiliates nothing to join. They can only charge a merchant a set-up fee, which will cover the cost making certain that the tracking solution is successfully unified, and can charge a monthly management fee, depending on the type of support offered to the merchant.
Affiliate networks generally charge the merchant a percentage of the commission earned by the affiliate, so that there are incentives for the affiliate networks if they perform well.
Setting up an Affiliate Campaign:
Affiliate marketing should rise your business, and rise with your business, so it is important to plan and prepare for long-running success. You need to decide the goal of your affiliate marketing.
If you are new merchandise, you might just want to build traffic and brand awareness. Then, you need to determine whether you are going to run your own program, from affiliate enrollment to tracking and paying, or whether you are going to use an affiliate network.