What is Affiliate Marketing?

Affiliate MarketingI am starting with the same excuse that I don’t have a preacher or endless experience in affiliate marketing but, certainly I am in to this business from some time and learnt a lot during this period. However, I would not be a perfectionist professional of affiliate marketing, Thus I won’t be able to unveil all the secrets and affirmative answers regarding all possible situations. But yes I would share all the possible knowledge I have, which will help many of you to earn money through affiliate marketing.

On the other hand same motto implements as usual: “Never stop learning and always test, test, and test”.

Well that’s enough! Here we go.

What exactly is Affiliate Marketing?

For those who have not been in affiliate marketing, I would like to describe the concept, which became the mother of affiliate marketing.

Companies actually want to bring their products and services to the mankind. This goes in different in different ways to ensure the productivity of company, because in this vying world, there are thousands of companies which are trying to sell their products.

Those companies which allow affiliate marketing on the internet provide a specific link to their products. Any website or blog publisher who is interested in affiliate marketing builds a shopping page on their website which contains the affiliate link of particular company, and that page guides to the information of products. Actually by doing this they offer their visitors to purchase the promoted product by using the affiliate link provided by the company. If anyone buys a product by clicking this affiliate link, then the website/blog publishers will receive commission in return from that company.

The internet offers the endless possibility of purchasing process being vigilant. Therefore a new form of advertising has been created called affiliate marketing.

Amazon can be taken as an example. There you can register for free and you can select the products you want to promote on your website. Products can be selected by categories or individually. Then Amazon store will generate the special link for you. You will publish this link on your website, if someone clicks on this link and buys something at AMAZON, and then in return you will receive few percent of that purchase as commission.

It means you are not selling anything yourself, you just do it as an affiliate marketer and lead your interested visitors to the product website through the affiliate link. This is how you earn money with affiliate marketing.

Please do keep in mind that you would be collecting commission of few percent and it can’t be compared with the commission which we could get if we were suppose to sell the product our self. Of course, commission can be increased if you lead more visitors to the destination website to purchase any product through your affiliate link.

Commission Modes/Types

The most popular way is to earn commission is pay per Sale. If someone buys something at Amazon by clicking your affiliate link then you will get e.g. 5% of the product price as a commission.

But next to the pay per sale there are a numbers of other commission are given below;

  • Pay per sale
    Pay per sale aka PPS is the most
    popular way of earning money in affiliate marketing. For example if someone purchases any product from Amazon by clicking affiliate link (mentioned in your website). You will get specific percentage (2%, 5%, 0r 10% etc) of the product’s price as commission. To track and to ensure that the product was sold by company and you got commission for all sales is very easy; it is based on cookies or included in URL. This is the secure and uniqueness of PPS for which it is best for affiliate marketers.
  • Pay per click
    Similar to
    Google AdSense you would get the commission each time if someone clicks on your affiliate link. It’s not dependent on sale; you would get paid any way if someone just clicks on the affiliate links. These prices are usually very low.
  • Pay per lead
    Pay per lead is solely based on qualifying leads. In this agreement you pay for leads generated at your destination website. You would get paid if someone contacts the dealer for the purchase through your affiliate link. This type of commission plan is oftenly used for consolation-intensive products, since hardly anyone buys anything or orders immediately.
  • Pay per signup
    As an example if someone signs up for an online game and if he went through your affiliate link to that website than you would get the money. Although the payment/fee is also usually quite low, but again it makes the masses if you refer more peoples.
  • Pay per view
    This is based on
    banner Impressions and also exists in affiliate marketing. However payment plan contradicts the benefits that distinguish the affiliate marketing.
  • Lifetime
    Some affiliate programmers doesn’t pay on daily basis/each sale made, but over a particular of time you would get paid for all sales made through your affiliate link in that period of time you might be able to earn more if the customer purchases high priced packages or keep buying from the dealer.

There are few more obscure compensation models, but in reality they hardly play any role.

Market data

Affiliate MarketingAffiliate marketing can be done in two ways. Either we cooperate straight to the merchant as for example Amazon. You log on directly to Amazon, where you can chose the products and generates the affiliate links for your website. Or you can use one of the affiliate networks. They have large number of audience and promotions of company’s products. They allow you to find suitable affiliate programs very easily as well as you can track of sales, click etc.

The website/blog publishes can be found in this way, hundreds of interesting affiliate programs and everything is almost ready to start as affiliate marketer. This is of course the time factor is insignificant when you consider that you would have to otherwise register separately at Amazon and other affiliates to find each affiliate products/programs manually which takes time. Mainly small businessmen and merchants can take benefits from it in very small period of time.

The affiliate market increases even in financial crises. In 2009 15% increased in affiliate marketing, and it touched the limit of 308 million Euros. Although the absolute volume is still growing lower than the mark. But still affiliate marketing is growing faster than the normal online advertising market (+10%), and it is likely said that even in financial crises affiliate marketing will grow beyond limits.

Affiliate Marketing With Blogs

There have always been some reports that affiliate marketing is not good enough with blogs. It is of course, if publisher chooses those affiliate programs which are not related with their blogs then it won’t give the desired results.

There are methods for blogs which work very efficiently in affiliate marketing. I will explain it in detail in an article in this series.

Some appropriate software’s such as WordPress provides best platforms for bloggers and doesn’t become an obstacle in affiliate marketing. A lot of affiliate marketers are using WordPress successfully and they are getting the desired results.

Blogs offer more benefits than normal website. You can build a reputation as a blogger more quickly. If the readers trust the promotions then blog has more chances than the normal website.

The Future of Affiliate Marketing

Affiliate marketing is one of the most productive marketing tools. With a minor cost you get a good return. Without it a day will come when marketing would mean nothing. And there are very few such marketing tools which can replace affiliate marketing which can give good return just by spending a very little amount.

In financial recessions, companies are looking for efficient marketing tools, and under these circumstances companies look out for affiliate marketers. Because every company wants to make more profit and invest less. Therefore, affiliate marketing is very popular now a day and at the time the costs are calculable in advance.

But even for blog and website publishers affiliate marketing is very fruitful. If you do the right way, then you can earn very good sum of money.

Affiliate marketing is an ideal profession but it has some merits and demerits which I am mentioning below.

The Advantages of Affiliate Marketing

  • There are no pre-departure costs for affiliates. This means promoting affiliate programs is not an expensive job.
  • There is a wide range of affiliate programs. Without a doubt, there are thousands of programs available from all categories to choose from.
  • Affiliate links and banners can be adjusted anywhere on webpage quickly and easily.
  • Affiliate programs can be promoted easily to targeted audience.
  • Promote products as you like. As an affiliate marketer you have full control on your side, and you can promote whatever you really want to.
  • Affiliate marketing offers a lot of potential. while working with respected company, you can increase your earnings just as part time affiliate marketer
  • Affiliate marketing is an ideal profession for the website/blog which have hundreds or thousands visitors.
The Disadvantages of Affiliate Marketing
  • There e are no revenue guarantees.
  • Companies apply the rules itself and present the commission to website/blog publisher.
  • Some of affiliates programs pay you very cheap commission. So there e are no guaranteed revenues.
  • There are certain affiliate programs that are not entirely legal. For example in my point of view, affiliating drugs or gambling is illegal.
  • If website/blog publishers are doing too much affiliation of their sites then they might lose visitors who don’t like such things.

I hope that this introduction has provided comprehensive and easily understandable information about affiliate marketing.

Of course this is only an introduction. Details of selection of partner, the optimization of affiliate sites, how to generate traffic, and so naturally flow would be given in another article in this series. So don’t panic. As always, your suggestions and comments are welcomed, do write your comments below.

Over the next few days, part two of this series would be published, which is related to the Best Affiliate Products and Niche Market Strategies.

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