Affiliate marketing programs can be attractive for many web entrepreneurs, but success is not always as easy as it sounds. Here are some of the issues that you need to be aware of before you decide to get into affiliate marketing.
Affiliate marketing is another marketing channel used to drive traffic to an Internet merchant’s web site. Affiliate marketing is built around the concept of setting up web sites that represent the products or services for one or more merchants. When a user finds an affiliate’s site and likes what they read about a product or service, they may decide to click on a link to learn more or to purchase the product or service. The user is then sent to the merchant’s web site where they can make the final decision about a purchase. Some programs pay a commission to the affiliate only if a purchase is made, but others pay a finder’s fee simply for referring a potential customer to a merchant’s site.
If done properly, everyone wins with an affiliate marketing relationship. The merchant sells something that they might not have sold otherwise because the customer might not have found their web site without the affiliate’s assistance. The affiliate marketer earns a commission for driving business to the merchant’s site. The customer wins because they found a product or service that they were seeking.
Affiliate programs come in several forms. This is a list of a few of the most popular types of programs.
- Advertising Networks – An advertising network will provide an affiliate with a block of code that needs to be inserted into the HTML code on a web page. The code usually allows the advertising network to controls the type of ads that are displayed on the affiliate’s web site. Google’s AdSense program is the largest affiliate advertising network on the web. AdSense will display contextually-related ads, which means the products or services offered in the ads will be related to the content on a given web page. Whenever a user clicks on an ad, the advertising merchant is charged a click fee. With AdSense, Google shares part of the click fee revenue with the web site owner whose site displays the ad.
- Lead Generation – With lead generation, a user must complete an online form and voluntarily provide contact information that will be forwarded to a merchant offering a product or service that the user is interested in. The affiliate is typically paid a flat commission for each lead that is provided. Commissions can range from $1 to $2 per lead for some merchants offering standard products or services, to $25 or $30 per lead sent to educational institutions (which is why you see so many ads for colleges). An affiliate will get paid for each legitimate lead that is generated, regardless of whether or not a sale is competed.
- Product Representation – A site that represents a merchant’s products could come in the form of product reviews containing a link to the merchant’s web site or they could involve a full or partial catalog of one or more merchants’ products. Most catalog web sites are created using “data feeds”, which consist of a large file or database containing all of a merchants’ products along with pricing and other information. Some data feeds are downloaded and used to periodically update a web site’s database using a custom script. Other data feeds are made available through XML data feeds, which can be accessed directly from the merchant’s web server through a custom script on the affiliate’s web site. XML feeds typically provide “real time” access to products, information, images and pricing. Amazon.com has the largest product affiliate marketing program on the web. With Amazon’s program, affiliate marketers can access almost all of the millions of products offered through their web site using real time XML data. Products are easily accessed through searches, categories and other criteria.
In Affiliate Marketing 101 Part 2, we will cover issues related to the pros and cons of affiliate marketing.