Affiliate Marketing 101

Affiliate Marketing 101 written by Carsten Cumbrowski / Mediapolis, Inc.

Pioneered by Amazon.com in 1996, "affiliate programs" (also known as Associate Programs or Partner Programs) are a simple way for Web sites to generate revenue by directing traffic toward other sites and a great way for the operating site to increase its traffic and revenue.

Because affiliate programs are so convenient and work so well, they have become the industry's dominant method of online Marketing.

There are 4 different kinds of affiliate programs to compensate "Affiliates" (or referring sites) for generating traffic to the Affiliate Program operating Website: Pay-Per-Impression, Pay-Per-Click, Pay-Per-Lead and Pay-Per-Sale.

The Pay-Per-Impression and Pay-Per-Click Model are not common to be used in Affiliate Marketing anymore. They were used in the Past, but were mostly abandoned due to Fraud and lack of Results. The Pay-Per-Click Model is used today by Pay-Per-Click (PPC) Search Engines like Overture (now Yahoo Sponsored Search or Google (AdWords) and since 2005 also Ask Jeeves Sponsored Listings. PPC Search Engine Marketing (Cost-Per-Click (CPC) advertising) is not Affiliate Marketing. It's an entirely different way of online Marketing and works different than the old PPC Affiliate Marketing.

For more information on PPC Advertising, especially Google AdWords and how to spent your online marketing dollars effectively, have a look at AdWords by Axandra (eBook).

The Affiliate Marketing shifted almost entirely to the Pay-Per-Lead and Pay-Per-Sale Model which is also known as Performance Marketing. The operating Site only pays "Commission" to their Affiliates for actual Results (a Sale, Sign-up etc.) and not just for promises (Clickthroughs, Banner Impressions).

The paid commission is usually a percentage of the referred sales or a flat dollar amount.

Operating an affiliate program to drive traffic to your website has never been easier. Most Sites utilize 3rd Party Services (so called Affiliate Networks). Those Services provide the infrastructure for you to track all the traffic and referrals to your Website. They also work as a Recruiting Platform to find Websites willing to promote your Products or Services. The Integration of their Service usually takes just a few days or sometimes just a few hours. Some of the Networks also help you to keep the generated overhead low (such as Payment of the Affiliates).

Here is a list of the most common Affiliate Networks:

Commission Junction, BeFree, Linkshare, ShareASale, Performics

You might want to have more control over your Affiliate Program and do everything In-House. You can, of course, develop all the necessary tools and technology by yourself, but that is may be not the most cost effective way. The technology was already been developed and proven itself and just has to be plugged into your existing Sites.

Here is a list of in-house Affiliate Program Software and Service Providers:

MyAffiliateProgram, AffiliateShop, AffiliateRunner

Thousands of Websites operating their Affiliate Program successfully today are the prove, that Affiliate Marketing is the most cost effective and efficient way to promote your products and services on the World Wide Web. Affiliate Marketing guarantees a fast ROI (Return of Investment) and some Online Merchants and Services rely already heavily on this Marketing Model.

You might want to check ABW (ABestWeb), an Affiliate Marketing Forum where Affiliates, Affiliate Program Operators (Affiliate Managers) and Affiliate Networks come together to share ideas, resolve problems and discuss issues.

ABW also offers Websites who run an Affiliate Program to open a private forum to communicate with their affiliates and to recruit new ones.

Marketing Resources:

SiteSell, Site Build It!, Make Your Knowledge Sell, Product Datafeeds for Affilates 101

Additional Information and Resurces