Understanding Affiliate Programs

Affiliate programs are commonly misunderstood, in order to understand affiliate programs lets start with terminology. For clarification purposes, an affiliate is defined as any "referrer" or website that promotes a product in an effort to earn revenue. A merchant is defined as someone who owns a product and is sharing revenues with an affiliate based on the affiliate's performance. Affiliate programs can drive targeted traffic to your website.

There are 3 basic affiliate programs, though only the first two are commonly used.

Pay Per Click - this is when an affiliate is compensated for sending traffic to the merchant. (AdSense is an example of PPC affiliate program)

Pay Per Sale - this is when the affiliate is compensated by the merchant if the referral generates a sale or purchase.

Pay Per Lead - this is when the merchant agrees to pay for a qualified (or sometimes unqualified lead), which is very uncommon because it is subjective and up to the merchant.

Affiliate websites tend to provide information, entertainment, and content services to their customers. The online merchants sell products, goods and services online. These are programs permitting affiliates to earn money based on the visitors to your site who click through to another's website. Some pay a token amount for the click through and others provide a percentage of sales when a visitor "clicks through" to your site and buys a product or service on the other party's site. This could represent a value added service to your visitors.

Affiliate programs allow you to pay and track incentives from other websites that send web surfers, leads or paying customers to your website. Commissions based on purchases made by traffic sent from the referring website can be paid. Besides a commission, an affiliate can receive a flat fee, or other incentives for all valid transactions it refers that generate a sale or lead.

Be careful that the affiliate's web page is not cluttered with banner ads that may crowd out your link, or that be annoying to customers. Affiliate programs enable affiliates to leverage their traffic and customer base in order to profit from e-commerce while merchants benefit from increased exposure and sales.

Commonly traffic to merchant sites is measured and affiliates can clearly see conversion rates. Meaning, they track the percentage of people they are referring, and how much of it results in earned revenue. If the affiliate finds a very low conversion, they will find a better way to monetize that traffic, quite possibly with a competing merchant product.

In order to be a successful affiliate, the affiliate site needs to either have tons of traffic or target a specific audience, frequently one untapped by the merchant. It has been my experience, the closer the affiliate site content resembles the merchant products, the higher the likelihood of a good conversion rate.

Once you are committed to the idea of affiliates, the next step is to determine the kind of tracking system you are going to use. Sales can be tracked by HTML code, which is placed in a shopping cart or on the 'order confirmation'/'thank you' page, and cookies, which are created after the customers click on a banner ad. Cookie killers have been a problem for the affiliate industry. Software vendors have an advantage over other merchants in that new technologies allow software developers to better control compensation. Vendors can 'wrap' their software insuring that their affiliates are compensated for referrals, even if the customer downloads a trial version prior to purchasing. Buy now buttons in the software have affiliate ids imbedded in the download. Combined tracking systems have more success than those that rely on a single tracking technology.

In order to develop a successful affiliate network, merchants must realize that affiliates spend ad dollars on site, and product promotion. If the affiliate is not compensated fairly they will not remain in the merchants network. The bottom line is that affiliate relationships are partnerships, when both sides feel the situation is fair and equitable the relationship will be a success.

About the Author:

Sharon Housley manages marketing for NotePage, Inc. http://www.notepage.net a company specializing in alphanumeric paging, SMS and wireless messaging software solutions. Other sites by Sharon can be found at http://www.feedforall.com, http://www.softwaremarketingresource.com and http://www.small-business-software.net

sharon@notepage.net

---

Online Business Entrepreneur? What You Must Know About Your Affiliates

As an on-line business entrepreneur it is your job to... Read More

Affiliate Marketing - Ten Excellent Reasons Why You Should Do It

There are many opportunities to make money working on the... Read More

The Many Benefits Of Affiliate Programs

Throughout the coming weeks, I am going to thoroughly cover... Read More

Affiliate Income Optimization

In my time researching the search engines, I've noticed something... Read More

Unique Joint Venture Twist: Make Huge Profits Even If You Have No Money, No Products, and No List

Would you like to jumpstart your online or offline business... Read More

Top Five Ways to Earn Extra Money Online at Home for Free

Here's a fact: everybody wants to earn extra money. We... Read More

A Few Words on Affiliate Team Building

It might have been Vince Lombardi or some other famous... Read More

Free Affiliate Marketing Page Pays $755 in Commissions From its First 100 Visitors

Affiliate marketing is an easy way to get started making... Read More

Is Earning Money With Affiliate Marketing A Myth?

Day 1 - What Are Affiliate Programs?Welcome to the wide... Read More

How to Evaluate an Affiliate Program

There are thousands of affiliate programs offering wide range of... Read More

What Is Affiliate Marketing?

Affiliate marketing refers to the promotion of products or services... Read More

The Lucrative Power of the Digital Era - Info Marketing

There are certain things we need in life that must... Read More

Top 3 Things All Affiliate Marketers Need To Use

Every affiliate marketer is looking for exactly what allows those... Read More

3 Ways to Squeeze Even More Revenue Out of Your Traffic Equaliser Pages

Ever wondered if, apart from Google Adsense, there were other... Read More

How To Build Website - Seven Steps For Building Optimized Websites For Affiliate Programs

The web has developed in such a mass marketing arena,... Read More

Design Web Site Around Affiliate Programs

When starting a Web business, most people choose a topic... Read More

Higher Commission Is Not Always Better

I have seen it a million times, especially from newer... Read More

Affiliate Marketing

Simply put, Affiliate Marketing is one of the most common... Read More

WEBMASTERS - Earn Money With Affiliate Links

If you have a website with some traffic, you can... Read More

Discover The Affiliate Program thats Right for You

Are you looking for a profitable Affiliate Program?When you start... Read More

Affiliate Marketing - Conversions

What is a good converting site?Well they say a "good"... Read More

A Unique Opportunity For Affiliate Recruiters

If you're a webmaster, web publisher, or web merchant, chances... Read More

Affiliate Marketing - How Ezine Ads Explode your Online Profits

So we're looking at E-zine advertising. Just a quick overview... Read More

Affiliate Marketing at a Glance: Helpful Hints

Regarded as one of the choice Internet marketing systems offered... Read More

High Paying Lateral Keywords

If you run AdSense on your site you know that... Read More

Five Things to Look For to Join Any Affiliate Program!

Here's a really simple way... to find out which affiliate... Read More

Protecting Yourself From Affiliate Link Thieves

So, you have worked really hard to build a fabulous... Read More

How to Start Your Own Affiliate Program ? Internet Marketing

This is how most entrepreneurs become filthy stinking rich! EVEN... Read More

How To Make Money On A Music Website Through Affiliate Programs?

Do you find yourself looking for a way to make... Read More

Instant Success - Yeh Right.

Join our affiliate-program and make your fortune overnight.Sound familiar ?How... Read More

Why Many Affiliates Fail

The title is ugly, but the statistics don't lie. Only... Read More

Popup Killers - Not just killing that Popup but also your Revenue!

With the increased use of popups on sites - when... Read More

Affiliate Programs... Whos Really Making The Money?

There will be a million and one affiliates out there... Read More