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What is Affiliate Marketing?
A Basic Overview...
Affiliate marketing is an internet marketing method that allows
websites to share traffic and revenue using banner and text advertisements.
Online merchants who sell goods and services pay commissions to registered
and approved website owners (Affiliates) for sending traffic to their
site.
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Your sales are tracked through your own unique
Affiliate ID that is encoded in a special link or URL. These special
codes can be used in a variety of ways, from banner ads to embedded
text ads. Visitors that arrive through your special link to the
Merchant’s site
are tracked and all sales from these visitors are credited to your
Affiliate commissionaccount. The length of time that you are paid
on each visitor's sales varies from a single visit to “lifetime”,
depending on the individual Merchant policy.
Commissions or revenues are earned by Affiliates through a variety
of methods that fall under these basic categories:
Cost Per Sale (CPS or CPA)
A visitor referred by the Affiliate purchases goods and services
from the Merchant. This payment structure is referred to as - cost-per-sale
or cost per acquisition (cpa). This is currently the most common
payment method used today, and provides the most cost effective
results for the merchant.
Cost Per Lead (CPL)
A visitor referred by the Affiliate completes a form on the Merchant’s
website. This is payment structure is referred to as - cost per lead
(CPL). This is most common in programs for insurance and mortgage
companies, or high end items such as automobiles, or high-end cruises,
seminars, etc.
Cost Per Click (CPC) or Cost Per 1000 Impressions (CPM)
A visitor to the Affiliate’s website clicks on a Merchant’s
banner and visits the Merchants website. CPC pays for each click & visit,
while the CPM pays on a per thousand basis for the display of the
banner, not on the actual click through to the site. Although these
were very popular forms in the early days of online marketing, they
have not proven to deliver the best results for the merchant in today’s
competitive market.
So for the Merchant online - a well run Affiliate marketing program
provides an excellent method of advertising across thousands of websites,
while only paying a commission for the actual sales made.
Why Become An Affiliate?
Simple - it’s a great way to get your
feet wet in online marketing without spending a fortune or to add
extra products and revenue to your existing website, and maximizing
your marketing efforts to your existing customer base.
Here are some of the benefits of becoming an Affiliate:
• Low or No Cost Set-up
• No Product Costs
• No Inventory
• No Fees to Join or Licenses to Buy & No Monthly Minimums
to Meet
• A Product or Service for Virtually Every Conceivable Market
Niche
• No Sales Experience Required
• No Employees
• No Merchant Account Needed
• No Order Processing or Product Shipping
• Little or No Direct Customer Service Involved
• 24/7 Business – You Earn Money While You Work, Play
or Sleep!
• Unlimited Territory!
• Income Potential Limited Only by Your Personal Marketing
Efforts
Could you make more money selling
a product that you developed yourself? Probably, but unless you have
some experience with running a business already
you might want to start out with an Affiliate program. By promoting
an existing
product you will keep both your site development costs and your ongoing
overhead to a minimum while you learn the ropes of marketing and
getting traffic
to your site. By working with an Affiliate program, you will be able
to take
advantage of their sales tools and experience start generating some
income
while you are learning.
With an affiliate program, you don’t
have the headaches of getting a merchant
account or dealing with unhappy or even fraudulent customers - this
all falls
under the responsibility of the merchant. And with the wide variety
of Affiliate
programs available, if you already have a web site - it is very easy
to find
products or services that will complement your existing business.
If you don’t
have your own business yet - but it is your ultimate goal to have
one eventually -
then choose programs that will appeal to the target market you want
to cultivate.
One strong word of advice here -
most Affiliate programs will give you a sales
page or website for the product (called a replicated site). This
is a great way
to get your website live quickly - but I strongly encourage you to
pay the small
fee to get your OWN domain name. Your own domain name gives you instant
credibility as a serious business person - and, when you really stop
to think
about this logically - how can you honestly ask a customer to spend
money for
the product you are promoting if you do not believe it enough to
invest a few dollars into the business yourself??
There is one truly wonderful advantage
to Affiliate Marketing that few people ever
really stop to think about - but it is a big one! Simply put - if
you don't like the
results that you are getting with one product, you can quickly dump
it and
substitute another one. If you are creative enough - and generic
enough! - with
your domain name - it will be something that is enticing enough to
bring in traffic
but not necessarily tied to a specific product! By doing this, you
can easily &
successfully switch products without having to interrupt or change
any of your
outstanding ads or promotional campaigns. Clever, huh??
Starting to see why Affiliate Marketing
can be so attractive? For sheer ease of
starting an online buiness, and with a lot less money than a full
blown website
with lots of content and goodies....you can quickly be online with
products and
websites - leaving you to devote yourself to the more important things...like
marketing and figuring out what on earth Google is up to this week <sigh>.
Now that you have an idea as to what
Affiliate Marketing is....I can hear your
next question already.....
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