What is affiliate program?
An affiliate program is a form of advertising, on the web, that rewards the affiliates (self-selected advertisers) for driving traffic to the advertiser (CTR) or for subsequent transactions (CPA).
An affiliate program uses a multi-level marketing concept where consumers (affiliates) attract additional consumers.
Some affiliate programs are multi-tiered, thus increasing the income earning opportunities for the affiliates (rewarded for their traffic and the traffic of affiliates they recruit).
Marketers have the option of developing their own in-house affiliate program (Amazon.com and bn.com are examples) or joining one or more of the large affiliate networks (Beefree, Linkshare or CommissionJunction). Affiliates have the potential to earn significant money, if done correctly.
With an affiliate program you offer affiliates an incentive to perform a particular outcome. This outcome may be to generate customer leads for your business, increase ‘clicks’ to your site or improve sales - from a banner ad, text link, graphic or other means such as a newsletter. The incentive is usually a fee, provided as a flat rate or percentage depending on your affiliate program objectives.
Benefits of an Affiliate Program
Affiliate program requires a dedicated program manager, financial investment, a solid strategy, and a focus on finding and keeping the best affiliates. Done right, it can bring a number of benefits.
You do not pay the affiliate until he/she has delivered the desired outcome and the affiliate makes money without having to worry about orders, inventory, shipping, or customer service.
Affiliates have access to a large pool of clientele in markets that you may not be able to effectively reach through traditional marketing methods. If you have a large base of affiliates your exposure is increased more.
Affiliates provide access to potential clients. You simply find the affiliates that have access to the markets you are interested in.
Affiliates can sell your products and services through various means including banner ads, text links, rich media, or through a newsletter. Utilizing these various marketing methods is important since software or immune to potential customers easily filters some forms of online marketing, such as banner ads.
Affiliates do the pre-selling. Affiliate marketing management software also enables you to identify trends in your program and provide you with data that can be used to improve your strategies.
Affiliate payment structure
There are basically three payment structures to consider for an affiliate program – pay-per-click, pay-per-lead and pay-per-sale.
Pay-Per-Click - Each time someone clicks into your site through a banner ad, text link, graphic or other access point from the affiliate’s site, you pay the affiliate a fee between $0.02 and $1.00.
Pay-Per-Lead - When a potential customer clicks on a banner ad, text link, graphic or other access point from the affiliate’s site, a form comes up, which asks the customer to complete and send. Each time a completed form is sent to you, the affiliate is paid a fee – usually a flat rate.
Pay-Per-Sale - Also called a revenue sharing program, the affiliate is provided with a percentage of the profits when they make a sale – usually between 10 percent and 25 percent. Larger companies may pay more.
The success of your affiliate marketing program will depend on the usefulness of the data you gather from your tracking software. Consequently it is important to discern what kind of information you will track to optimize your program and ensure its success.
Your tracking software is the foundation of your affiliate marketing program and should provide insight into many areas of your business. For instance, while you may have a goal to increase awareness of your site and are therefore interested in the number of clicks you receive, it is important to go beyond this measurement and identify your sales performance. Affiliates may be sending you thousands of customers, but the number means little if you cannot determine which visitors are converting into sales and who is sending them.
Additionally, the data you obtain can be used to improve your marketing techniques, alter your payment structure or identify which affiliates you should pay closer attention to.
An affiliate program is a form of advertising, on the web, that rewards the affiliates (self-selected advertisers) for driving traffic to the advertiser (CTR) or for subsequent transactions (CPA).
An affiliate program uses a multi-level marketing concept where consumers (affiliates) attract additional consumers.
Some affiliate programs are multi-tiered, thus increasing the income earning opportunities for the affiliates (rewarded for their traffic and the traffic of affiliates they recruit).
Marketers have the option of developing their own in-house affiliate program (Amazon.com and bn.com are examples) or joining one or more of the large affiliate networks (Beefree, Linkshare or CommissionJunction). Affiliates have the potential to earn significant money, if done correctly.
With an affiliate program you offer affiliates an incentive to perform a particular outcome. This outcome may be to generate customer leads for your business, increase ‘clicks’ to your site or improve sales - from a banner ad, text link, graphic or other means such as a newsletter. The incentive is usually a fee, provided as a flat rate or percentage depending on your affiliate program objectives.
Benefits of an Affiliate Program
Affiliate program requires a dedicated program manager, financial investment, a solid strategy, and a focus on finding and keeping the best affiliates. Done right, it can bring a number of benefits.
You do not pay the affiliate until he/she has delivered the desired outcome and the affiliate makes money without having to worry about orders, inventory, shipping, or customer service.
Affiliates have access to a large pool of clientele in markets that you may not be able to effectively reach through traditional marketing methods. If you have a large base of affiliates your exposure is increased more.
Affiliates provide access to potential clients. You simply find the affiliates that have access to the markets you are interested in.
Affiliates can sell your products and services through various means including banner ads, text links, rich media, or through a newsletter. Utilizing these various marketing methods is important since software or immune to potential customers easily filters some forms of online marketing, such as banner ads.
Affiliates do the pre-selling. Affiliate marketing management software also enables you to identify trends in your program and provide you with data that can be used to improve your strategies.
Affiliate payment structure
There are basically three payment structures to consider for an affiliate program – pay-per-click, pay-per-lead and pay-per-sale.
Pay-Per-Click - Each time someone clicks into your site through a banner ad, text link, graphic or other access point from the affiliate’s site, you pay the affiliate a fee between $0.02 and $1.00.
Pay-Per-Lead - When a potential customer clicks on a banner ad, text link, graphic or other access point from the affiliate’s site, a form comes up, which asks the customer to complete and send. Each time a completed form is sent to you, the affiliate is paid a fee – usually a flat rate.
Pay-Per-Sale - Also called a revenue sharing program, the affiliate is provided with a percentage of the profits when they make a sale – usually between 10 percent and 25 percent. Larger companies may pay more.
The success of your affiliate marketing program will depend on the usefulness of the data you gather from your tracking software. Consequently it is important to discern what kind of information you will track to optimize your program and ensure its success.
Your tracking software is the foundation of your affiliate marketing program and should provide insight into many areas of your business. For instance, while you may have a goal to increase awareness of your site and are therefore interested in the number of clicks you receive, it is important to go beyond this measurement and identify your sales performance. Affiliates may be sending you thousands of customers, but the number means little if you cannot determine which visitors are converting into sales and who is sending them.
Additionally, the data you obtain can be used to improve your marketing techniques, alter your payment structure or identify which affiliates you should pay closer attention to.
Great post.... Thanks for wright.
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