Affiliate marketing is a cooperative effort between merchants (the retailers) and an affiliate (the “publisher”). It is basically a form of revenue sharing or commission based advertising. An affiliate is compensated by the merchant for every visitor, subscriber and/or customer provided through his efforts.
The compensation to an affiliate is either through a pay-per-click (PPC) program (the affiliate receives money every time an advertisement is clicked), or through a pay-per-sale (PPS) program (the affiliate receives commission every time a posted advertisement on their site generates an actual sale or subscription.) Generally, the PPS program (also called cost-per-sale, or CPS) is the most tried and trusted form of affiliate marketing.
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For several years now affiliate marketing has proven to be a cost-efficient, measurable method of delivering long-tern results, both for merchants and for affiliates. Many companies, particularly those that originated in the early days of e-commerce, owe their staggering success to affiliate marketing…amazon.com being a perfect example.
The merchant is any internet site owner who chooses to capitalize on performance based marketing in order to take advantage of the numerous benefits of such a program. The merchant’s role is to manage and operate the affiliate program, creating advertising websites, support systems and payment plans which will attract interested affiliates. It is the merchant who decides how much he is willing to pay for each sale that results from a visitor sent from an affiliate.
Finding a good affiliate fit for their merchandise is key to generating income for both parties. In turn, due to the affiliates’ efforts, the merchant has access to markets and customers without him spending valuable research time.
The affiliate marketer also receives numerous benefits. The affiliate marketer is an internet site owner who promotes one or more merchants and their affiliate programs. With sufficient dedication and follow-through in building his business, these programs can generate a full-time income for the affiliate.
The affiliate should have an understanding of what the commission will be, how the payment method works, and the time and requirments involved in fulfilling the contract. The affiliate also must understand which merchandise their user base will be most interested in, assuring that products are targeted and are a good match for them, whether it be products or informational sites.
I hope this gives you a better understanding of this popular online marketing method, as it paves the way for Part 2, coming up next.
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