Affiliate Marketing Explained
Affiliate Marketing - The Basics
Affiliate marketing is a method of promoting online businesses in which an affiliate publisher is awarded royalties for every visitor, subscriber, customer and sale that is generated as a result of their advertising assistance. This is usually in the form of a sponsored link or ad on a publisher's host site that directs readers towards the affiliate company's product or service.
The goal of affiliate marketing is to provide businesses with a way to advertise on a well-known and high-traffic site without having to pay high fees. This has the advantage of allowing a business to advertise to a wide reader-base on a trusted site as opposed to aiming at random people. If a link is hosted on a site that is trusted and often visited by someone, there is a greater chance that they will follow it to learn more about what is being advertised.
The way affiliate marketing royalties work is that the publisher's site is reimbursed with some of the advertiser's profits in exchange for having allowed them to advertise on their site. This way it is profitable for both parties on the most basic levels. In addition, a strong business relationship may grow between the two groups, which can lead to further profitable affiliate marketing ventures.
Affiliate Marketing - The History
Affiliate marketing is one of the first forms of advertising that the internet has employed, with origins dating back to 1995 and before. It is widely attributed that Amazon is the figurative father of affiliate marketing as we know it, with their "Amazon Associates Program." This program was created as a response to a need for people to advertise their own books.
Amazon would sponsor the advertisements on their site, and in exchange they would take some of the sale profits as royalties to compensate for their costs. This became a very effective means for authors to spread the word about new books without having to accrue a high cost for advertising.
Affiliate marketing has grown quickly since these pioneer days. An e-commerce website, which was originally viewed as a marketing toy in the early days of the internet, ended up becoming an integrated component of many professional business plans as the years progressed. In some cases, affiliate marketing expanded a business' online profits to the point where they exceeded that of those earned by physical stores.
Affiliate Marketing - The Benefits For Your Business
Many merchant businesses enjoy and employ affiliate marketing strategies because they are "pay for performance," meaning that the merchant does not incur a marketing expense unless results are realized through the effort (aside from the initial setup of the program itself). The benefits over tricky hit and miss strategies like pop-ups or pay-per-click can be quite significant for small and medium-sized companies.
On the other hand, however, the ability to expand an affiliate program is somewhat limited. By having only one or a small handful of publishing sites, you can't really go beyond the segment of the target market that visits them. Other strategies like pay-per-click and SEO can be expanded so long as budget allows, which may eventually lead to a major increase in website hits and sales.
In order to determine which strategy is best for your business and the product or service you wish to advertise, it is a good idea to determine where the largest potential audience can be found, how best to attract their attention, and how flexible your advertising budget currently is. Being armed with this information can make your online campaign very successful, so long as great care is taken to remain on top of all situations as they develop.