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What is Affiliate Marketing and How it Works?

Admin June 12, 2017 Affiliate Marketing, Blogging 6 Comments

There are so many different ways for earning money from a blog like- Advertising, service provider, selling products. But Affiliate marketing is the best way of earning in the day to day life. We will discuss basics of affiliate marketing method in this article.

What is Affiliate Marketing?

Affiliate marketing is a way you can have some kind of commission in your pocket.

Basically, it is a type of marketing in which you can suggest someone any kind of online product. So if that person buys a product on your reference then you will get a commission.

That reference can be given through any blog or a website. This type of marketing is one of the oldest forms of marketing.

Affiliate marketing is a marketing model where an Advertiser (who wants to sell product or service) pays compensation to third party publishers based on performance measures, typically in the form of traffic or leads (sales or registrations) to advertisers product or service.

 

The marketing at its very core is about the relationship, a relationship between three parties. Advertiser, Publisher, and Consumer

1. Advertiser

In the world of Affiliate Marketing, the term advertiser means a type of company which sells the product. The product can be of any type like clothes, electronic items, bike parts, tickets, shoes or any kind of policies.

You just have to remember that if you are an advertiser then you have to pay to others people (publishers) for selling and advertising your product.

2. Publisher

The publisher in affiliate marketing can be a company or person who promotes the product of advertiser. In that case promoting cost money and the advertiser gives commission to the publisher.

When an advertiser gives a product for promoting then the publisher gives a reference to the product on his/her blog or website. When the reader goes and buys the product from the reference given in the blog or website then advertiser gives a commission on that.

3. Consumer

The consumer is the final step of the affiliate marketing triangle. It is the one who sees the ad on the publisher’s site or blog and clicks on it. That click takes the consumer from publisher’s website to the advertiser’s to complete the action, which we call conversion.

So in affiliate marketing, a consumer buys a product from advertiser’s site by reference of a publisher’s site.

What Are Affiliate Networks?

The affiliate network is a company which works as an intermediary between the affiliate (Publisher) and the merchant (Advertiser).

An example of networks is ClickBank and Commission Junction. As a publisher, you promote the product or service of some advertiser and share revenue directly with them. And you are letting these networks handle payment and product delivery.

So you can focus more on affiliate marketing part to promote the products without worrying about payment and delivery issues.

Sometimes, publishers are forced to go through an affiliate network because some advertisers are managing their affiliate programs through networks only.

A network contains the database of lots of products, from various advertisers. So publishers can choose products they want to promote from the database.

Why Learn About Affiliate Marketing?

Affiliate marketing is an easy way to earn money from doing what you enjoy. Basically, it gives you an option of doing your work from home. So it is a kind of start-up of your own work/office.

So in this kind of marketing you don’t need to work under anyone, you the boss of your own life. Do what you want and whenever you want.

It is also a low entry price in which you don’t need a high budget to start your work. It gives you the opportunity to communicate all over the world. In this kind of marketing, there is no such issue of storing or shipping.

Some advantages of Affiliate Marketing:

  • You can start work from your own place.
  • Enjoy your work because it gives you the right to do what you love.
  • Flexible work hours.
  • Low start up cost.
  • Global market.
  • No problem for storing and shipping of goods.
  • ZERO experience needed, first you can just start to write and then with the passing time you will get to know what you have to do.
  • Minimum overload, you just need a computer and an internet connection.
  • It is a passive income, once your website is ready then you don’t have to do much.
  • Designing website is an art, bring you the inner artist to work on it which is very satisfying.

Affiliate Marketing Related Terms

Publisher or Affiliate: A Web site owner that earns a commission or finders fee for referring clicks, leads, or sales to a merchant.

Affiliate Agreement: Terms between a merchant and an affiliate that governs the relationship.  This includes the terms on which the affiliate will be rewarded for the traffic sent to the merchant’s website.

The Affiliate Information Page: A page on your website or blog that tells the terms of your affiliate program including your commission rates, agreement, a link for existing affiliates to log in, as well as a link to the signup page for new affiliates.

Affiliate Manager: The person behind running the advertiser’s affiliate program.  This includes recruiting affiliates, set up incentive programs, build media, reporting on sales and paying affiliates.

The Affiliate Program is also known as Associate Program, Referral or Revenue sharing program.   In this scheme, the merchant (advertiser) benefits the affiliate (publisher) for web traffic, sales or leads. Advertisers reward publishers on a pay-per-click, pay-per-sale, or pay-per-lead basis.

Affiliate Tracking: The process of tracking a link uniquely by affiliate using an Affiliate Link.

Associate: Synonym for an affiliate.

Commission: Income an affiliate (publisher) gets for generating a sale, lead or click-through to a merchant’s (advertiser’s) website.

Merchant: It is the person or a company (also known as an advertiser), selling the goods or service is referred to as the merchant.  The merchant pays affiliates (also known as publisher) for sending traffic to the merchant’s website after a product or service is purchased.

Targeted Marketing: Offering the right offer to the right customer at the right time.

Tracking Method: the way that program tracks referred sales, leads or clicks. Generally, they use a unique web address (URL) for each affiliate or embed an affiliate ID number into the link that is processed by the merchant’s software. Some programs also use cookies for tracking.

Text Link: link that is not accompanied by a graphical image.

How Affiliate Marketing is Used?

There are some online stores who sales products like footwear, clothes, electronics or other services. Those companies usually give you an Affiliate program. Therefore you can just sing in for that program and get the tracking list to recommend the company site.

If your reader buys any kind of product then you will get the commission of that product.

Now every affiliate marketing program has a TOS (term of service), in which a reference product should be shelled. If that product is shelled in that given time, then only, you will get the proper commission.

When you start with an affiliate marketing program, you have to select items you want to sell. And the advertiser provides you a unique code which helps you to create traffic on the advertiser’s site. Many affiliate marketers will offer you their banners and links to make copies of those but you have to use the code only and place it to your referring site.

When the visitors will read and click on the given code (banner or link) it will automatically shift visitor to the advertiser’s site. And if they buy any product, that will make a commission for you.

Advertiser will follow your performance from your join ID or with the software which they use.

Now here’s the point that you don’t have to advertise goods every time.

Different affiliate program uses special payment terms here are some of them.

1-pay per sale– it is an online advertising method in which the company gives you the commission for creating the sale.

2-pay for click– A type of advertising program in which advertiser pay you on a click. When a personal visit to your site and click on the given link then too company gives you the commission.

3-pay per lead-A type of program in which the advertiser pays the affiliate on an exchange of leads, like downloading software or any kind of trial offer. In this, a consumer follows the link to the advertiser’s site and completes the task. By the completion of the task, they pay the publisher.

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