practice in which a business rewards one or more
person’s’ for each visitor or customer brought about by
his or her marketing efforts.
A Web-based pay-for-performance program
A partnership program that involves a third party
performing functions like marketing or advertising to
attract customers to a merchant or online business site.
Also possibly called a revenue sharing program, a
partnership program, or any other variation of the term,
an affiliate program is a program in which you typically
sign up with a merchant to sell or advertise their
products and then they give you a commission based on the
sales you generate. …
WHO IS AN AFFILIATE
An affiliate is someone who does not necessary belong to
an organization as a member or as an employee, but has
some connection with it that is important enough to be
given its own name. In Internet marketing, an affiliate is a
person who is not connected to an e commerce site but only
joins its revenue sharing program, advertises on behalf of
the merchant, and receives (usually) a percentage of the
income that is generated by customers who reach the
merchant through him or her
The connection between the affiliate to reach the merchant
might be through a text link or an image (banner).
a pop-up ad, or a pay-per-click text ad, The
affiliate may also have articles, a blog, or other
material that supports, explains, describes, or reviews
the merchant’s products that is an advantage. The merchant
benefits by the affiliates efforts to increase the
merchant’s website traffic and visitors’ that
follow-through to make a purchase or sign up. The
affiliate in return benefited a portion (%) of the income
from any transaction or action cause by his or her effort.
Affiliates and merchants may connect directly through the
merchants efforts to find and invite affiliates to join
his or her program. On the other hand, they may connect
through an affiliate network that serves as a sort of
clearing house for the both like clickbank.com,hubpages.com
,clicksor.com and so on.
THE OBJECTIVE OF HAVING AFFILIATES
In most cases, the primary objective behind an affiliate
program is to obtain a particular sales level. Other
common objectives include increasing awareness and gaining
Your option depends on a number of factors. For example,
your objective may depend on how established your company
is. If you are a new business, then you will most likely
focus on increasing awareness and gaining new customers.
If you are an older company doing great with a solid
customer base you will most likely focus on sales growth
through your affiliates.
THE AFFILIATE STRUCTURE OF PAYMENT
Basically there are PPC (pay per click),PPL (pay per
lead),PPS (pay per sale),PTR (pay to read) ETC
Pay-Per-Click – Each time someone clicks into your site
through a banner ad, text link,or graphics the affiliate
receive a fee, a share of his or her effort ranging
between $0.01 and $1.00.
Pay-Per-Lead – When a potential customer clicks on a
banner ad, text link, graphic or other access point from
the affiliate’s site, a form comes up, which asks the
customer to complete and send. Each time a completed form
is sent to you, the affiliate is paid a fee – usually a
Pay-Per-Sale – Also called a revenue sharing program, the
affiliate is provided with a percentage of the profits
when they make a sale – usually between 10 percent and 75
pay-to-read-This type is becoming more popular by the
day,almost like pay per click it’s only that the intention
of the merchant is truly to make you read and sign up
The structures depend on a number of factors… your
objectives, the level of risk, the product or service you
sell, and the value of your customers.
Objectives – If your objective is to increase awareness of
your site and bring in more sales, then it makes sense to
pay your affiliates with a combination of the
pay-per-click and pay-per-sale commission structures.
Level of Risk – The least risky of the payment structures
is pay-per-sale since you only pay out when you make a
sale. The other payment methods offer no guarantee that
you are gaining viable customers who will ultimately bring
sales to your business. As a result, you could end up
paying out more money than you are making. There is also a
high risk of fraud with the other payment structures. For
instance, many customers prefer not to share their
personal information and may not correctly fill out a
‘lead’ form. Consequently, you may end up paying out on
Product or Service – Usually, if you are selling a
product, then the most common payment structure is
pay-per-sale. On the other hand, advertising sales based
sites typically use a pay-per-click payment structure.
Subscription based sites will usually charge a flat
Customer Value – The value that you place on your
customers can impact the fees you pay your affiliates. For
instance, if you have an objective to maintain your most
valuable customers, you may increase the percentage you
pay your affiliates each time a customer returns to your
site or buys your product or service more than once.
Affiliate payouts are the biggest cost in an affiliate
program and can have a large impact on the success of your
program. Structure your affiliates’ payouts to reflect
your program objectives and the outcomes you want to drive
HOW TO OUT-SOURCE THE AFFILIATE PROGRAM
The challenges in operating an affiliate program is how to
develop and install software that will manage, track and
evaluate your program. Most companies do not have the
resources to launch this type of software on their own and
therefore outsource the job to outside companies, such as
clickbank,clicksor and LinkShare, that specialize in this
Identifying the right affiliates and keeping them
satisfied is important for the success of your affiliate
marketing program. If affiliates are not happy with the
service you provide they will not be interested in
dedicating their time to your business.
The most important point to consider when looking for the
right affiliates is to identify those that cater to your
target markets or focus on markets that may be interested
in your product or service.
In most cases, when you outsource an affiliate marketing
program you will have immediate access to an affiliate
network. To gain access to other affiliates, you can list
your program on an affiliate directory on the Web.
Tracking software is the foundation of your affiliate
marketing program and should provide insight into many
areas of your business. For instance, while you may have a
goal to increase awareness of your site and are therefore
interested in the number of clicks you receive, it is
important to go beyond this measurement and identify your
sales performance. Affiliates may be sending you thousands
of customers, but the number means little if you cannot
determine which visitors are converting into sales and who
is sending them.
Addition, the data you obtain can be used to improve
your marketing techniques, alter your payment structure or
identify which affiliates you should pay closer attention to.