What is Affiliate Marketing?

Posted by Denise Griffitts on Jul 13, 2008 in Internet Mastery | 0 comments

Affiliate Marketing is a revenue sharing venture between a website owner and an online merchant. The website owner will place advertisements on his websites to either help sell the merchant’s products or to send potential customers to the merchant’s website, all in exchange for a share of the profits.

There are three ways to earn money through affiliate marketing:

Pay Per Click — Every time a potential customer leaves the affiliate website by “clicking” on the link leading to the merchant’s website, a certain amount of money is deposited in the affiliate’s account. This amount can be pennies or dollars depending on the product and amount of the commission.

Pay Per Sale — Every time a sale is made as a result of advertising on the affiliate’s website, a percentage, or commission, is deposited into the affiliate’s account. One good example of pay per sale is Amazon.com.
Amazon has hundreds and hundreds of affiliate partners that market their products through Amazon’s web mall. When someone purchases, say, a computer from HP off of Amazon’s site, HP pays Amazon a commission for that sale. When you become an affiliate for Amazon, you will be paid a small commission for any sales you make from their site.

Pay Per Lead — Every time a potential client registers at the merchant’s website as a result of the advertisement on the affiliate’s account, a previously determined amount is deposited into the affiliate’s account.

How Does It Work?

Once you join an affiliate program you then are able to choose the products or banners you want to include on your Web site, and then receive the code you will need to insert on specific Web page or throughout your Web site. You can also create email campaigns.

When joining the affiliate program, you will agree to their terms of service, called an affiliate agreement, which will tell you what requirements you must meet and how the click-through, lead generation or sales are tracked.

Affiliate programs work by using a combination of a unique user ID and cookies to track your leads and subsequent revenues. Most will offer a private affiliate section on their Web site where you can get your HTML code and also check your affiliate account status and information. Through the use of browser cookies, any person who uses your link to make the desired action within a set amount of time contributes to your affiliate revenue.

Make sure you really understand the affiliate agreement and that you’ll be able to comply with it. Take the time to check out the advertiser before joining to ensure they really do pay out to affiliates and that their program is not a scam. Look at what the advertiser is offering in terms of tracking and reporting tools for affiliates. Good programs will provide you with a way to access real-time automated statistics to view conversions, sales and commissions.

Pay-per-click programs offer the lowest dollar value for conversions, and you’ll need a higher click through rate to earn money. Pay-per-lead and pay-per-sale programs will usually offer a higher commission, but you’ll have fewer visitors clicking through to complete the transactions, so you need to have a lot of unique visitors. Use your own traffic and reporting tools to determine which type of program will have a better chance of success on your own site.

If you want to learn how to use affiliate marketing to build and grow your online business (and you should!), one of the best resources that I can recommend to you is Rosalind Gardner’s step-by-step “Super Affiliate Handbook“. Rosalind regularly earns $30,000 to $50,000 per month and is considered the industry standard bearer. At $47 for the book, this is a must-have for any online entreprneur’s library.  There is no out of date information here, by the way.  Rosalind updates this manual on a regular basis, and has done so for many years. This means that when you purchase the Super Affiliate Handbook, you will also gain access to the Super Affiliate Handbook Members club and will receive free updatesof the Handbook as they are ready.  It doesn’t get any better than this!