We have all heard the term before, but what is affiliate marketing? Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s own marketing efforts. The industry has four core players: the merchant (also known as ‘retailer’ or ‘brand’), the network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as ‘the affiliate’), and the customer. The market has grown in complexity to warrant a secondary tier of players. This includes affiliate management agencies, super-affiliates and specialized third party vendors.
Affiliate marketing is commonly confused with referral marketing, as both forms of marketing use third parties to drive sales to the retailer. However, both are distinct forms of marketing in their own right. The main difference between them is that affiliate marketing relies purely on financial motivations to drive sales while referral marketing relies on trust and personal relationships to drive sales.
Affiliate marketing is frequently overlooked by advertisers. While search engines, e-mail, and website syndication capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers’ marketing strategies.
The concept of Affiliate marketing is simple, you promote a merchants website and they give you commission on the sales you generate or the click throughs you send. There are a number of methods that you can use to make money from affiliate marketing both on and offline. Methods include using your own website, mailing lists you have built up, ebooks, blogs, video blogs, forums, PPC advertising, local media advertising, and custom software.
Affiliate programs provide you with your own log in area and statistics. You can choose which adverts to use (banners, text links, offline flyers), how many visitors you’ve sent, and how many sales you’ve generated. It’ll tell you who much commission you have made and possible which affiliates you have referred to the program and what cut of their commission you get. The tracking works by generating unique tracking ids that you apply to your links to the merchant site.
What is affiliate marketing compared to online marketing? Is there an overlap? Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC – Pay Per Click), e-mail marketing, and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
What is affiliate marketing used for in your business? Please comment on our blog and share your ideas.
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