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Affiliate Marketing 101

Affiliate Marketing 101

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Do not start affiliate marketing without reading this e-book!
Do not start affiliate marketing without reading this e-book!

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Published by: Omnistar Affiliate Software on Jul 16, 2012
Copyright:Attribution Non-commercial

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07/19/2012

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Wouldn’t it be great if you could make money based on the efforts of other peoplemarketing your products? It would be like owning a commercial empire and havingthe option to delegate all of your sales responsibilities. Affiliate marketing worksalong similar lines, only you don’t have to first establish a brand, or come up withhuge capital.Let’s say that you are a new or aspiring company, with your own product or serviceto sell. You have a great USP and a solid understanding of the market. However,you’re not exactly sure how to best establish your market presence without goingover budget. In this guide, we’re going to show you how affiliate marketing helpsand why it is a cost-efficient way to increase your profits month to month.
What Is Affiliate Marketing?
You simply reward the people you work with for the results they deliver. It’s asimilar concept to “commission” in that you reward one or more affiliates accordingto an agreed upon arrangement, such as how many visitors or customers theybring in for you. You are basically outsourcing your marketing and sales efforts.This type of marketing program divides into the following components:The Merchant (which is your company making a first time effort in affiliatemarketing)The Network (the company that represents and works with your affiliates)The Publisher (the individuals or companies publishing content on behalf of you; also called the affiliates)The Customer (obviously, the most important man/woman in the room!)Of course, since the birth of this industry, many other “roles” have surfaced, frommanagement agencies and various other third parties. However, the formula doesremain as simple as the big four.Affiliate marketing is closely entwined with Internet marketing because of globalization and technology. However, the two are not the same thing.Nevertheless, the ubiquity of the Internet and its effective use in affiliate marketingcertainly obscures the differences, and the challenges unique to both markets.First, understand that affiliate marketing predates the boom of the Internet (if notInternet technology). Revenue sharing principles first originated with governmententities, and eventually spread to commercial companies and productioncompanies. For instance, the Nixon administration and the early NFL were usingrevenue sharing concepts long before television affiliates, who were long beforeInternet marketing!However, since the mid-nineteen-nineties, much of what we now know as revenuesharing has transitioned to mainstream e-commerce. Simply put, the Internet is a
 
boon to instant communication, and instant communication means potential leads.When the Internet went mainstream, it eliminated the need to cold-call entireneighborhoods, pressure family and friends and go door to door like a pushysalesperson.Now, you have the advantage of targeted advertising, which can be done for minimal money or time investment through ways of Search Engine Optimization,paid Search Engine Marketing, e-mail marketing and display ads (banners, text,pop ups, etc.) Of course, these are not the only methods of soliciting new leads.Some smart marketers think "outside the box" and publish reviews, or create pressreleases or news stories, as a means to grab attention.
Who Should Use Affiliate Marketing?
Here’s the truth—affiliate marketing is not for everyone. Just because you are asmall to mid-sized company that wants to try affiliate marketing online or offline, thisdoesn’t mean that you should use it. In this section, we’re going to discuss the prosand cons of using such a program, and who ideally the system benefits.First, consider the most obvious advantages of using an affiliate network to boostyour income.Very Low Capital (using an affiliate program does not require a large marketingbudget. In fact, all you really need are an affiliate software program and a website)You Don’t Have to Hire a Staff (Your sales associates are all self-employed; theyhelp you to promote your products on your behalf and earn commissions on everyitem they sell)You Don’t Pay for Opportunity but for Performance (You don’t have to risk much,since you only pay when you get a sale or a lead. That cuts expenses for payingunderachieving employees as well as overall office costs)Flexibility (You are allowed flexibility when you pay your affiliates; you can choosethe result that earns payments; if you are convinced you’ve made the sale when aperson downloads a product, you can select that as the “action” required for payment. You get total control!)There are also other advantages intrinsic to Internet technology. When you sign upwith a quality affiliate program you can often times receive free website traffic andbetter search engine rankings for your content. Additionally, the automaticfunctions provided by computer software simplify the process. Thus you are givenmore time and money to expand your business elsewhere.If you have saleable products or services but can’t devote greater time andresources to advertising, then maybe it’s time to look into an affiliate program. Thistype of program works better when the products/services are proven and market-friendly items. Note that some affiliate networks also charge anywhere from $500to $5,000 to include your company. Comparatively it’s cheap, but not the best
 
solution for someone who needs to simply get a positive cash flow going for the firsttime.
Common Terminology in Affiliate Marketing
Let’s go over a few unfamiliar terms in affiliate marketing, starting with the“advertiser”, which is another term for you, the merchant. Then there is the affiliate:The website owner or independent salesperson creating leads for you is theaffiliate and is earning commission based on results.The “Affiliate Link” refers to a URL tracking link that identifies the affiliate and sendstraffic to the original site. These allow you to track where the traffic is coming fromand who deserves the credit. Next, consider the importance of affiliate software,which helps you run and manage this important program. Without automatedsoftware, sign ups, link management and tracking results would be a pain!The types of results worth paying for include:"Click Throughs" (when a user selects a link to your website)Pay-Per-Lead (referring to conversions, usually a “lead”)Pay-Per-Sale (referring to conversions, usually a commercial sale)Cost Per Thousand (how much 1,000 banner impressions - merely the loading andthe sight of these ads are worth)Unique Clicks (this only counts unique clicks from each visitor, and involvestracking IP addresses)In this business, you might also hear terms like “co-branding” or “tracking code.”Co-branding refers to a contract in which affiliates can create their own brand andlogo. Tracking code refers to the HTML you must insert into each page so that youcan track your results. The “affiliate manager” is in charge of tracking all affiliateprogram data, including sales, purchases commissions and other relatedinformation.
Ways to Grow your Business with Affiliate Marketing
There you have the gist of what makes affiliate marketing work. However, you maystill be asking, what are the methods that lead to results and profit? Search EngineOptimization works very well, as it provides pages of content and attention-grabbing “landing pages” that keep buyers’ interested. In addition, publishing newcontent on a website, sending company newsletters through email, publishingregular blogs on an appropriate product, and social media interaction can alsoboost interest too.Allow your affiliates to use their resources, creativity and motivation to help sellquality products. Remember, in affiliate marketing you are running a “marathon” of a sales race. Thus you cannot burn out too soon or expect miraculous results over 

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