What Is Affiliate Marketing?

(My Original Blog Post: What Is Affiliate Marketing?)
Affiliate marketing has a lot of descriptions, yet all have the same common meaning. Affiliate marketing is a very large business piece on the world wide web. It is a unified effort between merchants and an affiliate’s website. For several years now, affiliate marketing has proven to be a cost-efficient, measurable method of delivering long-tern results through "pay for performance" (PFP). It has become famous for Internet websites who's owners are trying to make some extra or additional income for their site. Every day, people get interested in affiliate marketing and want to make money from it. But in many cases, these new affiliates do not fully understand the affiliate world and make costly mistakes. In other words, affiliate marketing has often been misunderstood because of the many variables involved.

One of the common misconceptions that are being associated about affiliate marketing is “selling”; though selling is an important aspect of affiliate marketing and the central function of an online business operation. Another is that affiliate marketing is often tied in with “advertising”. While the importance of advertising in marketing a certain product is not to be underestimated, the fact of the matter is, advertising like selling, is merely a part of the many functions of a successful marketing campaign.

With affiliate marketing, the affiliate is compensated for every visitor, subscriber and/or customer provided through his efforts. The said compensation may be made based on a certain value for each visit determined by the advertiser (not the publisher). The most attractive aspect of affiliate marketing from the merchant’s viewpoint is that no payment is due to an affiliate until results are appreciated. Also known as "pay for performance, or PFP.

Affiliate marketing is commonly being run by affiliate networks and this affiliate networks, like Commission Junction and AdBrite, are composed of two functional bodies, the group affiliates and the group merchants--sometimes referred to as Publishers--. Each has their specific obligation and role when it comes to affiliate marketing. The affiliate network acts as a third party between the advertisers and the publishers. The network provides the technology to deliver the merchant’s campaigns and offers with tracking capabilities. The affiliate network also collects commission fees from the advertisers and then pays the affiliate publishers which are part of the program and published the advertiser's ads on their web sites.

The merchant publisher is any web site or social network page owner that wants or desires to take advantage of pay for performance based marketing. The benefits to the publisher are several; First off, the publisher maintains and operates the affiliate ads on their site. If it would be necessary, the publisher needs to do their part by researching interested affiliate websites to ensure that they are a good fit for that particular website. Finding a fit for the advertiser's merchandise would be the key to higher generated sales from their site. The publisher has access to many advertising programs without him spending valuable time searching the entire web. Banner ads on the publisher's websites, should not distracting or misleading to the site user. Instead, it should produce interest for that product and drive the website visiter to the advertisers’ website. It is up to the advertiser to decide how much he is willing to pay for each sale that results from a visitor sent to their site from the publishers. Often times, advertisers will require an action or conversion before they are willing to pay the publisher for sending the visitor. This is usually where the new visitor fills out a form of some sort as a lead or makes a purchase from the advertiser's site.

The advertiser also sees some benefits. The advertiser is a web site owner that promotes one or more of their products or services with an affiliate network so that publishers will find the programs or ads. Advertising through publishers, can generate a steady flow of leads and new sales for the advertiser through the publisher. But this is not an easy task to accomplish. The advertiser needs to produce effective ads that will catch attention to targeted visitors and the payout for performance has to be fair to the publisher if the advertiser wants their ads to be picked from many other publishers. The advertiser also has to have a user-friendly website that makes it easy for visitors to convert to customers without hassle and confusion. For example, once the ad is clicked on from a publisher's site, the new visitor should quickly identify what they were led there for in the first place and be able to make a quick purchase in 3 clicks or less. Sales also make a huge impact on whether or not a visitor converts to a customer.

Affiliate marketing is a great situation for both the publisher and the advertiser. If they would work together, they can be an advantage to both. Plus the fact that it seems to make sense, it is easy and inexpensive way to start out, plus you can be up and running within no time. However, there is one thing to consider first, that is how to get traffic and make your offer different than all rest as an advertiser. And to get traffic for the advertiser and be different than all the rest as a publisher.