Affiliate Marketing is a derivative of Internet
marketing where the advertisement publisher gets paid for every customer or
sales provided by him. Affiliate marketing is the basic for all other Internet
marketing strategies.
In this type of marketing, affiliate
management companies, in-house affiliate managers and third party vendors are
effectively utilized to use E-mail Marketing, Search Engine Marketing, RRS
Capturing and Display Advertising for the success of the product. The web traffic
can be traced with the help of a third party or own affiliate programs. A lot
of work is involved in this process. At first marketing by this method involved
lots of spamming, false advertising, trademark infringement, etc. But, after
the invention of complex algorithms and advance security this has been
regularized to make it safer for doing business and shopping online. This even
led to the better scrutinizing of the terms and conditions by the merchants.
Affiliate marketing became more profiting with the opening of more
opportunities but at the same time it also increased the competition in
marketing.
Due to this pressure in house affiliate programs for
merchants became a thing of the past and were replaced by out-sourced programs.
The companies that offered this service have expert affiliate and network
program managers who have various affiliate program management techniques. These affiliate networks have publishers
associated with them who help them with the advertising part.
Affiliate marketing was started by cdnow.com who had
music oriented websites. They placed list of music albums on their site and
they paid others if they put those links in their websites when a visitor
bought their album through their site. The first company to link with cdnow.com
was Geffen Records. Two months later, Amazon was offered by a woman that she
would sell Amazon’s books on her website and she should be paid a certain
percentage in return if she sold Amazon’s books through her site. They liked
the idea and started the Amazon associates program. It was more of a commission
program where they received a commission if a visitor clicked their links and
banners on other’s site and bought anything through it.
Since its invention, the affiliate network has been
adopted by various businesses like travel, education, telecom, mobile, gaming,
personal finance, retail, and subscription sites, the most common being adult
and gambling sectors. In UK alone, affiliate marketing produced £ 2.16 billion.
The compensation methods used are Cost per sale (CPS),
Cost per action (CPA), Cost per mile (CPM) and Cost per click (CPC). The first
two are the more famous methods today. This is because in CPM and CPC, the visitor
which turns up on a particular website might not be the targeted audience and a
click would be enough to generate commission. CPS and CPA have a compulsion
that the visitor not only clicks on the link but also buys something or signs
up for some service after it which proves that he is among the targeted
audience. Only in the above case the affiliate gets paid. So the affiliate
should try to send as much targeted traffic as possible to the advertiser in
order to increase his/her returns and for this reason affiliate marketing is
also known as performance marketing because it totally depends on the
performance of the affiliate. The affiliate team can be differentiated from a
sales team from the nature of their jobs. The job of the affiliate team is to
drag targeted traffic to a point and from that point it’s the job of the sales
team to influence the visitor to buy the product or the service.
This is a very effective kind of method because the
money is being paid only when results have been achieved. The publisher incurs
all the cost except that of initial setup and development of the program, which
is incurred by the merchant. Many businesses give credit to this method of
marketing for their success.
