Introduction To Affiliate Marketing or Performance Marketing

Affiliate marketing is a performance based promotional activity to gain maximum exposure or leads. It is a marketing type which rewards affiliates or publisher for driving visitor or customer to the merchant’s website. The five main players associated to each other for performing a pre-defined and confirmed action are the merchant or advertiser, the network, the publisher or affiliate, marketing agency and the customer. rnIn a typical scenario the publisher promotes a merchants offer on its affiliate website in the form of banner, static link, discount code or product feed. A potential customer clicks on an affiliate website and then the affiliate redirects the customer on to the retailer website to make the purchase and the affiliate receives a commission for the conducted sale.rnAffiliates:rnAffiliates or publishers are individuals, companies or group of people with an affiliate website. They drive traffic to their website and then send customers to the merchant’s website.rnMerchants:rnThe merchant or advertiser with an online store is the entity who is actually selling the product or service. rnNetwork:rnAn affiliate network is basically a technology provider, which works as a central communication hub between the publisher and the merchant. A network provides tracking, invoicing, affiliate recruitment, reporting and technical services. Some of the popular affiliate networks are Commission junction Zanox, Affiliate Future, Affiliate window, Trade Doubler and so on.rnAgency:rnThe affiliate marketing agency offers support to the merchants in setting up the affiliate campaign, finding top affiliates, recruiting affiliates, detailed reporting and managing the program on daily basis.rnAffiliate websites:rnSome of the popular types of Affiliate websites are Price Comparison websites, loyalty websites such as cashback and reward, Discount Coupon & rebate websites, Content & Review websites, Group Deal websites and CRM websites that offer charitable donations. rnAffiliate payment models:rnThere are a number of payment models in affiliate marketing which are used to define the payments between merchants, publishers, and advertisers or search engines. Most popular are,rnCPA or Cost Per ActionrnCPL or Cost Per LeadrnCPC or Cost Per ClickrnCPM or Cost Per Thousand rnPros and cons of affiliate marketing: • Merchants prefer affiliate marketing because of its performance based results. • Merchants have complete control of recruitments and management with maximum exposure at very low cost. • Affiliate marketing needs on-going management and optimization. • Sometimes you have to pay networks high commissions rates ranging from 20% to 30% of sale.