AFFILIATE
MARKETING
AFFILIATE MARKETING is a type of performance-
based marketing in which a business rewards
one or more AFFILIATES (PARTNERS) for each
visitor or customer brought by the affiliates's
own marketing efforts.
The owner of the online shop and the owner of
the website sign an agreement according to
which the former advertises his products on the
website of the latter and gives him commission
for each sold product.
Affiliate marketing connects online merchants
and independent websites in the role of
affiliates or partners. They are so called
commercial agents or sales employees for the
products of certain shops.
There are 4 core players in the game:
the MERCHANT (also known as RETAILER or
BRAND)
the NETWORK (that contains offers for the
affiliate and takes care of the payment)
the PUBLISHER (also known as AFFILIATE or
PARTNER)
the CUSTOMER
COMPENSATION METHODS
Predominant compensation methods are:
pay per sale (PPS) - 80% of affiliate programs
cost per action (CPA) - 19% of affiliate programs
cost per click (CPC)
cost per mille (CPM – cost per estimated 1000
views)
Cost per click and cost per mille are used by less
than 1 percent of the traditional affiliate
marketing programs. However, these methods are
used heavily in display advertising and paid
search.
MULTI- TIER PROGRAMS
Some advertisers offer multi-tier programs that
distribute commission into a hierarchical
network. If a publisher who has signed up for
the program attracts other publishers to do the
same using his sign-up code, he will get
additional commission (at a lower rate) when
other publishers perform activities on the net.
In most affiliate programs we have one-tier
programs, in the minority of affiliate programs
we have two-tier programs.
ADVANTAGES AND DISADVANTAGES
Affiliate marketing has its advantages for the
partner and the merchant. The merchant pays
commission exclusively for the sold products.
Affiliates are not employed by the merchant
whose products or services they promote.
As affiliate you can promote products of
different merchants. You are given a
commisssion for each sale and sometimes
additional stimulus for exceeding objectives.
If you want to perform Affiliate marketing, you
need AFFILIATE PROGRAM . For offering affiliate
programs you don't need to register your own
private company, the only condition for
cooperation is your own website. Joining the
established affiliate programs is mostly free, but
there are also exceptions where you have to pay
registration costs.
As affiliate you can freely decide upon the
choice and setup of advertisements and other
ways of promotion. You can end the cooperation
with affiliate program any time without any
obligation to the merchant.
The sale is registered by AFFILIATE TRACKING
which is based on cookies.
LOCATING AFFILIATE PROGRAMS
There are 3 primary ways of locating affiliate
programs for a target website:
Affiliate program DIRECTORIES
large affiliate NETWORKS that have
platform for hundreds of advertisers
the TARGET WEBSITE itself
THE MOST FAMOUS COMPANIES USING
AFFILIATE MARKETING
Affiliate marketing is a very popular type of
marketing used by all biggest online shops such
as Amazon and eBay, it is used also in Slovenia
(EnaA.com, Life.si).
Links to some companies and networks that
offer affiliate programs:
Amazon.com - www.amazon.com
Barnesandnoble.com - www.barnesandnoble.com
MotherNature.com - www.mothernature.com
Priceline.com -www.priceline.com
LinkShare -www.linkshare.com
Commission Junction - www.cj.com
ClickXchange.com – www.clickxchange.com
Shareasale.com – www.shareashale.com
ClickBank – www.clickbank.com
Affiliatewindow – www.affiliatewindow.com
