What is Affiliate Marketing or Performance Marketing?

By: Mo Babar


Affiliate marketing is a marketing form that allows a merchant to track and measure the genuine source of a sale and pay out a commission to the affiliate or publisher. It rewards affiliates or publisher for driving visitor or customer to the merchantís website. The five main actors linked to each other for performing a pre-defined and confirmed action are the advertiser, affiliate network, the affiliate, agency and the customer.
The publisher endorse a merchantís offer on its affiliate website in the form of banner, static link, discount code or product feed. A customer clicks on an affiliate website and then the affiliate redirects the customer on to the merchantís website to make the purchase and then affiliate gets a commission for the confirmed sale.
Affiliates:
Affiliates or publishers can be individuals, companies or group of people with an affiliate website. They drive traffic to their website and then redirect customers to the merchantís website.
Merchants:
The merchant or advertiser with an online store is the entity who is actually selling the product or service to its customers.
Network:
An affiliate network is a third party facilitator between publishers and merchant web sites. It connects advertisers with publishers so they can do online business together and sometimes with affiliate marketing agencies that provide affiliate campaign set up and campaign management services. The Affiliate Networks use a tracking technology with a unique URLís which notify the network that from which website or blog someone has clicked on a banner advertisement or link. Affiliate networks can pay on CPC (Cost per Click), CPA (Cost per Action) or CPS (Cost per Sale) type of payment models. Round about 20% of the commission of each transaction is given to the affiliate network in return for the convenience they provide.
The fees vary from network to network where conventional affiliate networks typically charge initial setup fees and sometimes maintenance fees. Some networks charge their merchants a percentage of the commission that affiliates obtain as fees for using their services. There are abundant of affiliate networks with no joining fees for affiliates whereas there is usually a fee for merchants to participate. Many affiliate networks let anybody to register while others may have a visitor site requirement that want your website to get a certain minimum amount of visitors on a daily basis. Such networks require a fixed number of visitors before you are considered valuable of receiving ads from the affiliate network. Working with an affiliate network is always beneficial both for publisher and merchant. Publisher and networks can work together directly to get detailed creative, data, other promotional material and request speedy payments. Merchants can build up list of their best performing affiliates and they can work with them more closely and effectively.
Agency:
Online Marketing has changed the way the new businesses searches to attract a new customers. Finding customers online and then turning them into potential buyer is a tricky job that needs experience, knowledge and expertise. A digital marketing agency can provide you creative e-commerce solutions to tackle the online problems. Agency experts are capable of boosting your brandís online presence and maximizing every opportunity available online by using contemporary marketing tools and methods. There are array of services that a quality digital marketing company can offer to your business The affiliate marketing agency provides support to the merchants in setting up the affiliate campaign, finding top affiliates, recruiting affiliates, detailed reporting and managing the program on daily basis. An agency can provide you creative e-commerce solutions to tackle the online problems. Agency experts are capable of boosting your brandís online presence and maximizing every opportunity available online by using contemporary marketing tools and methods.
Affiliate websites:
Some of the popular types of Affiliate websites today are Price Comparison websites, loyalty websites such as cashback and reward, Discount Coupon & rebate websites, Content & Review websites, Group Deal websites and CRM websites that offer charitable donations.
Affiliate payment models:
There are a various payment models in affiliate marketing which are used to define the payments between merchants, publishers, and advertisers or search engines. Most popular are,
CPA
CPL
CPC
CPM
Advantages and disadvantages of affiliate marketing:
ē Merchants like affiliate marketing because of its performance based results. They donít have to pay until a sale takes place.
ē Merchants have total control of recruitments and management with maximum exposure at very low cost.
ē Affiliate marketing needs on-going management and optimization.
ē Sometimes you pay networks high commissions rates ranging from 20% to 30% of sale.
Affiliate marketing is a better way to make some money on internet. If you do it properly; you can simply make some extra money compare to your regular offline job.

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Mo Babar, Digital Marketing manager at iLead Media, specialises in Internet marketing, web design & development, and social media applications.

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