What is Affiliate Marketing?

Affiliate marketing is a system of endorsing web businesses (merchants/advertisers) in which an affiliate (publisher) gains an amount for every subscriber, visitor, customer and/or sale provided through his or her hard work. Affiliate marketing is also the term used for industries that have a number of different types of companies and individuals that are doing this form of internet marketing. The forms include affiliate management companies, affiliate networks, 3rd party vendors, in-house affiliate managers, and various types of affiliates/publishers who use a number of different systems to advertise the products and services of their merchant/advertiser associates.

To some degree, affiliate marketing has actually overlapsd with the method of other internet marketing systems. This is because affiliates are using the same schemes used by most of the merchants themselves. These processes include organic, paid email marketing, search engine marketing, search engine optimization, and to some degree display advertising.

Affiliate marketing is using one site to drive traffic to another. It is like the stepchild of online marketing. While e-mail, RSS, and search engines get much of the notice of affiliate marketing, online retailers, despite lineage that goes back almost to the beginning of online retailing, carry a much lower profile. Yet affiliates resume to play an essential role in e-retailers’ marketing strategies.

Affiliate marketing usually uses simple one-tier programs. But it could go up to two-tier programs. Two-tier programs involve a publisher who signs up with the program with an advertiser where the publisher gets rewarded for the agreed activity conducted by a referred visitor. Afterwards, the publisher attracts another publisher to sign up for the same program using the initial publisher’s sign-up code. Then, all future activities by the secondary publisher will result in an additional yet lower commission for the initial publisher. Multi-tier programs and snowballing techniques are not considered as affiliate marketing since such programs fall under the multi-level marketing category.

Usually, merchants choose affiliate marketing programs because in most cases, it is basically based on “pay for performance model”. It means that merchant does not sustain a marketing expense unless results are realized, excluding of course, the initial setup and development of the program. Some businesses owe their success and growth to this marketing method. The glaring one example is Amazon.com. It has also been very beneficial to small and midsize businesses.

Affiliate marketing also helps those publishers especially those who have their own websites. It provides them with a means to easily earn through advertisements. This has fueled the growth of websites that cater to various interests and advocacies. The publisher still retains his or her independence since he or she can decide what advertisement to put on his or her website. It is one of the easiest methods to earn online.

There are still a lot of issues hounding affiliate marketing such as e-mail spam, spamdexing, adware, and lack of regulations. But there is a lot of room for growth in this kind of marketing especially with the growth of Web 2.0. This is because this new web-based technology  brought about improved security and regulation in the industry.

This entry was posted on Saturday, March 21st, 2009 at 8:25 am and is filed under Affiliate Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.