Nov 4, 2015

Posted by in Marketing

Understanding Affiliate Marketing

Affiliate marketing is a marketing channel based on performance that consists of driving traffic from multiple sources such as websites, social media, search engines, and even phone. The affiliates guide customers to the retailers site and receive a commission after clients complete an action on the retailer’s site. Affiliates are designed to increase the traffic of a website and to attract as many clients, which results in a commission they receive either as a fixed dollar amount or a percentage of sales. It might sound complicated, but understanding affiliate marketing can actually be simple if you know how to approach it.

  • Affiliate networks manage tracking, reporting, and payouts of the retailer for a set-up fee that can range between several hundreds of dollars to thousands of dollars, depending on the reputation of the network and the size of the retailer. When a retailer joins an affiliate network, they get access to many affiliates they can choose from as the affiliates apply to the retailer’s affiliate program. Most affiliates manage more than one website and they can often develop a site for a specific retailer if they see it as a good opportunity. Also, the retailer can choose their affiliates by looking at their previous work. Once a retailer approves an affiliate, it offers them access to their advertising inventory that consists of proven text links and banners of various sizes. These will allow the affiliates to attract consumers to the retailer’s site and to have them perform an action of any kind.
  • Besides the traffic-driving affiliates that attract consumers to a certain website, there are also the affiliates that expertise in pay-per-click search engine marketing. This idea is great for retailers that don’t rely on the help of an internal team that focuses on search engine marketing. However, the pay-per-click affiliates don’t make use of banners and are more benefited by keywords lists and advance notices for product launches. These affiliates are called pay-per-click because they pay for each click from the search engine to the site and if the traffic converts, they receive a commission. Affiliates don’t usually have the same budget as the retailer, so they have to manage theirs very well, considering they will be paying for each click. This is why affiliates prefer long keywords and campaigns that are different from the retailer’s own search engine marketing so they won’t have to compete with the retailer.