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An Introduction to Affiliate Marketingby Ian MugridgeWhat is Affiliate Marketing?In general terms, affiliate marketing can be defined as a form of performance marketing, where the affiliate is paid a commission from the merchant for generating sales or leads. The affiliate is basically providing advertising for the merchant (either for the brand in general or particular products). Unlike traditional advertising though, the affiliate is only paid for the visitors that they send to the merchant or the sales / leads that they generate.Many people compare affiliate marketing to multi-level marketing (MLM) schemes. However there is one important differences. In affiliate marketing very rarely do you get paid for introducting others. You are paid for your performance selling the merchants products and not for your team-building skills. That said however, there are some programs that might offer you a second level income for referring other affiliates, but not the large downlines that you see in MLM programs.
How Does It Work?If you surf the web regularly, then you won't have failed to see that many sites display advertising for other sites or products (there's one at the top of this page) - that is affiliate marketing in action. The site displaying the advert is the affiliate. If you clicked on the advert and performed some action (such as buying a product) then the affiliate will receive their commission. The action that you would need to perform varies from affiliate program to affiliate program and we'll cover this in more depth later in the article.The technicalities of how it works are basically that each affiliate is given a unique id and that id is embedded in the adverts that they display. When a user clicks on the advert, the affiliates id is passed to the merchant so that they can see who generated the referral. This is quite often achieved using cookies, which can mean affiliates getting paid for sales generated some weeks after the initial referral.
Types of Affiliate ProgramsAffiliates can earn commission in a number of ways, such as -
A further variation is the length of time after clicking on your link that the visitor has to perform the action in for you to earn the commission. Some programs will only pay you if the visitor purchases something on that visit (a notible example of this is Amazon). Other programs will use cookie durations from 15 days upto a number of years. Although it is important to note that this depends on the visitor not deleting the cookie or subsequently visiting the same site from another affiliate.
Who Offers Affiliate Programs?Affiliate marketing is a very cost-effective form of advertising for merchants - they only have to pay is the affiliate performs. Because of this it is becoming a very popular form of marketing with both small merchants and large traditional companies.The following is a small list of companies with an affiliate scheme -
Where next?Over the next few months I'll be putting together a series of articles to get you started in Affiliate Marketing. In the meantime, if you have any specific questions, why not take a look at the Affiliate Marketing forum here on Out Of The Rat Race.
About the Author Ian Mugridge is a freelance IT Consultant with 10 years experience in industry. In addition to general IT consultancy, Ian has been advising clients on Internet marketing for the last 5 years. This article was originally published on "Out of the Rat Race". |
Articles Getting Started in Affiliate Marketing Getting Started in Affiliate Marketing (part 2) Affiliate Marketing Glossary
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