What is Affiliate Marketing?

by Alex Ang on 01/07/08 at 3:24 pm

Affiliate Marketing is a web-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts. Affiliate Marketing is a booming business, Forrester Research projects that Affiliate Networks to produce $280 billion for e-commerce sales in 2008.

How does Affiliate Program work?

Affiliate Marketing involves using one website to drive traffic or customers to the Advertisers’ site. You will get paid for every sale done referred from your site. Every affiliate has their own affiliate ID, so when somebody clicks on their link, the person is tagged with you as the referrer. This concept of revenue sharing, paying commission for referred business, predates that of Affiliate Marketing and the Internet. The most active sectors for Affiliate Marketing currently are the adult, gambling and retail sectors. Amazon.com is one of the first significant adopters and has now hundreds and thousands of affiliate relationships.

80% of Affiliate Programs today use revenue sharing or Cost Per Sale (CPS) as compensation method, 19% use Cost Per Action (CPA) and the remaining 1% are other methods, such as Cost Per Click (CPC) or Cost Per Mille (CPM). Some Advertisers offer multi-tier programs that distribute commission into a hierarchical referral network of sign-ups and sub-partners.

How do I get started?

Start looking around Affiliate Directories website like Clickbank which offers lots of affiliate products. The number of Affiliate Marketer is ever increasing for one simple reason – it is easy and possible to make money online. However, to avoid being scammed, do make sure the Affiliate Program has a website with contact information and that it offers a clear description of what you need to do, how much and when you’ll be paid.

Affiliates take risks and ‘trial and error method’ is probably the way to describe how Affiliate Marketers operate. To be a successful Affiliate, efforts and patience are essential.

Conclusion

Affiliate Marketing is a long-term and mutual beneficial partnership between Advertisers and Affiliates. Both parties benefit in the process and using Affiliate Marketing enable you to make extra money from your website which sounds like a good deal!