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Understanding Affiliate Marketing

Written by: Andrew Rondeau

Article Overview: One of the buzzwords for internet marketers is affiliate marketing. The promises of untold and uncountable wealth echo around the internet and many new marketers are dazzled by these words.

Understanding Affiliate Marketing

One of the buzzwords for internet marketers is affiliate marketing. The promises of untold and uncountable wealth echo around the internet and many new marketers are dazzled by these words. It's never that easy of course. Most people know this. But it is still really hard to ignore the call that some fairly unscrupulous people put out. As a new or even seasoned internet marketer the big point is to be cautious. Buyer beware!

Let's have a look at what the term actually means.

By definition joining an affiliate program means that you as the affiliate undertake to send new visitors and buyers to a business for a reward. When you achieve a result, which is pre-determined in the affiliate program you sign up to, then you get paid.

There are several players involved in the affiliate marketing industry. There is the merchant who offers the product or service for sale, the network, the publisher which is another term for the seller and the consumer.

This business model has grown very quickly and has led to establishment of a secondary tier of service providers including Affiliate Management Agencies, Super-Affiliates and Specialized Third Parties vendors.

For internet marketers it seldom matters whether they sign up as an affiliate direct with the company such as with Amazon or via an affiliate management agency such as Commission Junction.

Affiliate marketing has certain elements in common with ordinary online sales practices. Marketers might use traditional advertising methods. They might also use organic search engine optimisation, paid search engine marketing, e-mail marketing and display advertising such as banner ads.

On the other hand affiliates might use methods which are more internet specific. This could be in the form of writing revues on the products and services offered by a partner on their own blog or on social media platforms. What it boils down to though is using one website to drive traffic to another.

The most active sectors for affiliate marketing are the adult, gaming and retail industries. The sectors which are expected to experience the greatest growth are mobile phone, finance and travel sectors. Several of the affiliate solution providers anticipate growth in the business-to-business sector as well as advertisers who might add affiliate marketing to their mix.

Amongst the most commonly used compensation methods eighty percent of affiliate programs offered today use revenue sharing as their method of reward. It's also called cost per sale (CPS). Some nineteen percent use cost per action and the very small remaining percentage uses cost per click (CPC).

As examples Amazon would be considered a cost per sale merchant. The affiliate gets paid a commission if a sale has been completed whether this is a book or a DVD. The customer will have reached Amazon via the link on the affiliate's website.

A cost per action payment would be made if a visitor introduced by the affiliate signs up to an e-mail subscription service or an online dating site. A cost per click example is something like Google's Adsense program. The affiliate shows text ads on his site and if anybody clicks on the ad the affiliate receives a very small commission.

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Article Tags: advertising methods, affiliate management, affiliate marketing, amazon, banner ads, business model, buzzwords, commission junction, display advertising, e mail marketing, internet marketer, internet marketers, management agencies, management agency, marketing industry, media platforms, revues, sales practices, search engine marketing, traditional advertising



Related Forum Posts
Re: Affiliate Marketing - Open for Discussion - Carol, Mary and David - thanks for your great input and insight on Affiliate Marketing! This is the kind of discussion I was hoping for in this thread. There are pros and cons to Affiliate Marketing, just as there are to any business. As has been suggested, he best policy is to proceed with caution and do some research before jumping in. As Carol has recommended, this topic thread in the EvanCarmichael.com forum is the ideal place to ask questions and seek further input on available Affiliate Marketing programs. If a person is serious about building an online business and is interested in Affiliate Marketing plans, they should approach the process as they would any other form of business. Research, ask questions, compare opportunities, participate in forums on online business and Affiliate Marketing. GT :-]
Re: Affiliate Marketing - Open for Discussion - Hi GT Affiliate Marketing is one of the easier ways to get started making money online, but it does take quite a bit of work before you see any great results as you have to keep promoting constantly. It does teach you one hell of a lot about all aspects of Internet Marketing though as you will need to learn how to write and submit articles, create and maintain a blog, social networking is a great help to affiliates too..the list goes on and on. In fact from what you learn from Affiliate Marketing you can apply to any niche and be sure to succeed, take care, Carol
Re: Affiliate Marketing - Open for Discussion - You made some very good points here Jeff and I agree with you, Affiliate Marketing should not be something that you concentrate all your efforts into. As i said earlier I have learned a lot with Affiliate Marketing and continue to do so, and it has helped me tremendously to understand what I am going to have to do in my chosen niche(s). I am also being coached by the same group of mentors as GT and we are all moving forward daily to achieve our ultimate goals. Take care, Carol
Re: Should Evan add a "Social Media Marketing" category to the f - Hi, Online Marketing would be a great title, and having sub categories would make it even better, there would plenty of categories to choose from, Social Media, SEO, Article Marketing and yes even Affiliate Marketing to name just a few, great looking site btw Jeff, take care, Carol
Re: Internet Marketing is the best business in the world - No problem. I am also interested in creating an ebook one day and am glad that I can finally contribute to someone who is, maybe not so up to date in an area that I have some knowlege of. Also I forgot to mention Affiliate Marketing from my previous post. Getting others to sell WhyNot's ebooks for him is a great way of promoting as well.


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