Marketing is a necessity for e-commerce success. There are multiple ways to market products and services online. Some of these involve cooperation with other websites or businesses. Affiliate marketing is one of these marketing strategies. It is, however, an often misunderstood tactic. The world of affiliate marketing can be much easier to navigate if you understand the terms and how the different parts work together. Enjoy this simplified introduction to affiliate marketing.
Affiliate marketing involves several different parties. Basically, an online retailer offers monetary compensation when sales are made due to referrals. This is different than basic referrals. Payment is the motivating factor for these referrals or advertisements. This is a much faster way to get a brand name known by more consumers.
The merchant is the part of the equation that is seeking recognition and sales. They may have a product or service that is offered. Their “brand” is something that they want to share with the public, so they are more recognizable to a larger group of people. The merchant often seeks out other websites or products that compliment what they offer. This way their target audience is more likely to be reached.
A network is the company that keeps track of clicks, leads, and sales. Affiliates usually choose to receive payment through direct deposit, making payments easy and convenient. Network sites that focus on affiliate marketing require the merchant to put money in their account, up front. This allows for the network to make payments as necessary to the affiliate. Networks make money by charging fees per transaction. The merchant is responsible for these fees. There are a variety of networks to choose from.
The affiliate is also often called the publisher. This is because they are the ones that publish the advertising material or referral. These are usually websites of some sort. Blogs and business sites are most commonly chosen as affiliates. A blog with a subject that correlates to a product can be nicely paired with the merchant of that product. Affiliates use standard advertising methods to promote products and services. These may include reviews, ad displays, and SEO content. Other methods are in-text links, e-mail marketing, and discount offers. The affiliate does not get paid to advertise but is compensated when something sells. This is a strong motivator for affiliates to use efficient advertising tools.
The customer comes into the picture after all of the advertising is up and running. A merchant may already have some regular customers; however, traffic should increase after initiating a relationship with an affiliate. When a customer visits the affiliate’s website, they are then introduced to the merchant’s product or service with the chosen advertising method. Customers are the most important part of the monetary gain. A business must get new customers, and maintain repeat customers. Once a decent customer base is gained, some companies scale back on their affiliate advertising. This is a bad move. It is important to continue advertising so that the customer base can continue to grow.
Payments are set up in different ways. Some merchants pay per click, meaning that the affiliate gets paid each time a guest visits the merchant’s site. Other merchants may not pay unless visitors leave contact information to receive correspondence. This called pay per lead. Finally, some merchants may only pay once a sale has been made. These payments may be a set amount for each sale or a percentage of each sale. These payments, at times, may have to reach a certain threshold before they are released. A common amount is $50. Once an affiliate reaches this amount of earnings, the money is released by the network. Some networks schedule monthly payments on the same day each month.
The best way to understand a concept like affiliate marketing is to learn about the basic concepts related to it. Merchants, customers, and affiliates all play a part in successful affiliate marketing. This type of marketing benefits all parties involved. The merchant brings in more customers, the network takes a cut of the money, and the affiliate also gets paid. Once you break down the concept, it is much easier to understand. Affiliate marketing is an often overlooked, but valuable resource.
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