introduction to affiliate marketing or performance marketing
Affiliate marketing is a performance-based promotional activity to gain maximum exposure or leads. It is a marketing type that rewards affiliates or publishers for driving visitors or customer to the merchant's website. The five main players associated with each other for performing a pre-defined and confirmed action are the merchant or advertiser, the network, the publisher or affiliate, the marketing agency, and the customer.
In a typical scenario, the publisher promotes a merchant's offer on its affiliate website in the form of a banner, static link, discount code, or product feed. A potential customer clicks on an affiliate website and then the affiliate redirects the customer to the retailer's website to make the purchase and the affiliate receives a commission for the conducted sale.
Affiliates:
Affiliates or publishers are individuals, companies, or groups of people with an affiliate website. They drive traffic to their website and then send customers to the merchant's website.
Merchants:
The merchant or advertiser with an online store is the entity that is actually selling the product or service.
Network:
An affiliate network is basically a technology provider, which works as a central communication hub between the publisher and the merchant. A network provides tracking, invoicing, affiliate recruitment, reporting, and technical services.
Agency:
The affiliate marketing agency offers support to the merchants in setting up the affiliate campaign, finding top affiliates, recruiting affiliates, detailed reporting, and managing the program on daily basis.
Affiliate websites:
Some of the popular types of Affiliate websites are Price Comparison websites, loyalty websites such as cashback and rewards, Discount Coupon & rebate websites, Content & Review websites, Group Deal websites, and CRM websites that offer charitable donations.
Affiliate payment models:
There are a number of payment models in affiliate marketing that are used to define the payments between merchants, publishers, advertisers, or search engines. The most popular are,
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CPA or Cost Per Action
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CPL or Cost Per Lead
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CPC or Cost Per Click
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CPM or Cost Per Thousand
Pros and cons of affiliate marketing:
• Merchants prefer affiliate marketing because of its performance-based results.
• Merchants have complete control of recruitment and management with maximum exposure at a very low cost.
• Affiliate marketing needs ongoing management and optimization.
• Sometimes you have to pay networks high commission rates ranging from 20% to 30% of sales.
Affiliate marketing is a far better way to make some money on the internet. you do it properly; you can easily make extra money compared to your regular offline job.