Affiliate Marketing

Affiliate marketing is an Internet-based marketing method whereby a business rewards one of more affiliates for each visitor of customer brought about by the affiliate's efforts. While search engines, e-mail, and website syndication are some of the methods most favored by online retailers, affiliate marketing continues to play an important role in e-retailers' marketing strategies.

The primary thrust here will be an overview of the types of affiliate websites as categorized by advertisers and affiliate networks. While at the moment there is no widely accepted categorization used by the industry as to what defines an affiliate website, the following types are commonly used by affiliate marketers:

Cost Per Action Networks

These are top-tier affiliates that expose offers from the advertiser with which they are affiliated to their own network of affiliates.

Comparison Shopping

A price comparison service (also known as shopping comparison or price engine) allows individuals to see different lists of prices for specific products. Price comparison allows individuals to see different lists of prices for specific products. Price comparison services typically do not actually sell products themselves; rather they provide a list of prices from retailers from whom users can buy. Sites do not charge users anything to use them, but instead are financed by payments from retailers who are listed on the site. Depending on the business model of the comparison shopping site, retailers will either pay a flat fee to be included on the site or pay a fee each time a user clicks through to the retailer web site or pay every time a user completes a specified action - for example, when they buy something or register with their e-mail address.

Pay Per Click

Affiliates that use pay per click (or PPC) to promote advertiser's offers. PPC is a form of Internet advertising that is used on content sites (like blogs for example) as well as search engines and ad networks. Advertisers post ad content with various such web host and the host is paid only if and when their ad is clicked. The term "pay per click" literally means what it ways; the advertiser pays each time a visitor clicks on the ad.

Niche Marketing

Niche marketing involves cultivation smaller segments of larger markets. In an online context, a website is developed and promoted to uniquely serve a targeted and usually loyal customer base, giving the affiliate a small but regular income stream. This technique is then repeated across several other niche websites until a desired income level is achieved.

Loyalty Websites

Loyalty websites typically operate by providing a reward system for purchases via reward points, cash back (i.e. customers can earn cash rebates on online purchases that they make), or charitable donations.

Internet Coupon and Rebate Websites

Internet coupons typically provide for reduced cost or free shipping, a specific dollar or percentage discount, or some other offer to encourage consumers to purchase specific products or to purchase from specific retailers.

Shopping Directories

A shopping directory is a web directory style website that focuses on sites that sell products or services. Shopping directories used by affiliate marketers are those that typically that list merchants by category without such things as coupons and price comparisons (which often change regularly and thereby require constant updating).

E-mail List Affiliates

These are owners of large opt-in (i.e. people voluntarily sign up to be part of them, sometimes for a fee) e-mail list. Such sites typically employ a technique known as e-mail drip marketing which is a form of e-mail marketing where a company sends e-mail messages to subscribers on a scheduled basis using e-mail marketing software.