What is Affiliate Marketing?

These days, it’s remarkably easy to set up your own Web site. If you have a computer connected to the Internet you can very easily build a personal website. But what if you want to take your site to the next level? If you have a content-driven Web site, how can you make money off your traffic? One (and there are others) is affiliate marketing, but what is that you ask?

Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliates own marketing efforts.

Perhaps the simplest way to explain affiliate marketing is that, it is a way of making money from your online activities whereby you, as a publisher are monetarily rewarded for promoting a business’s product, service or site.

How Does Affiliate Marketing Work?

Firstly you’ll have to sign up to an affiliate program (whether directly with an advertiser or via a network) which is usually free. Then an affiliate link with a unique affiliate ID will be assigned to you. Browse through the advertiser / product / service offerings and select with programmes you’d like to promote. Then use the affiliate link provided, when you are marketing your chosen advertiser. This unique link will identify you (usually by cookies) as the source of the conversion and allocate your commission to you.

A cookie is a technology that works with web browsers to store information like user preferences, or shopping cart contents. In affiliate marketing, one task that cookies manage, is to remember the link or ad the visitor clicks on, which publisher the ad belongs to, any custom parameters and the date and time of the click.

The processes behind affiliate marketing from start to payment

What role do the networks play?

The networks provide the back-end technology needed to run an affiliate program in addition to helping advertisers and publisher manage their campaigns:

  • Software that tracks sales and attributes commission to affiliates
  • Provide access to a wide assortment of publishers
  • An easy way to upload advertising banners and logos
  • Own unified product feed format
  • Publisher Tools
  • Accounting systems that debit a merchant’s account and issue payments to affiliates for their commissions
  • Real Time Reporting

What Types of Affiliate Promotions Are There?

There are a number of forms of these types of promotions but in most cases they involve you as a publisher earning a commission when someone follows a link on your blog to another site where they then buy something.
Different affiliate programs can use common payment terms such as:

  • Pay per Sale: In this program a merchant pays you when a purchase takes place. Commissions are often a percentage of a sale but can also be a fixed amount per conversion.
  • Pay per Lead: You get paid once the referred visitors submit their contact information on the target site by filling out a simple contact form or survey.

Can you Make Money from Affiliate Marketing?

There is no such thing as easy money and there are no magical tips in this article that will help you get rich overnight. An affiliate marketing program is a lot of work, and in most situations there’s a lot of competition, so you won’t generate commissions immediately on a regular basis.

While affiliate marketing is incredibly lucrative, the unfortunate reality is that most people who try it, rarely make vast amounts of money as it relies upon many factors including:

  • Traffic (high traffic helps a lot)
  • Finding relevant products
  • Finding quality products
  • Building trust with your readers
  • Having a readership who is in a ‘buying mood’
  • You being able to write good sales copy (and more)

The best way to think about affiliate marketing is quality over quantity (The Pareto principle or 80-20 rule states that, for many events, roughly 80% of the effects come from 20% of the causes.). How this translates in to affiliate marketing for publishers, is that you need a solid business model.

There are a number of publisher models in existence today (and I’ll cover those in another post), but the key point to take away from this is, that as a website owner, you need to create “value” for your readers. Why should they come to your site? What do they get out of it or benefit from it?

So in conclusion, Yes! You can make money from affiliate marketing. Provide value, leverage your relationship with your readers and the money will come.