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It would be like owning a commercial empire and having the option to delegate all of your sales responsibilities. Affiliate marketing works along similar lines, only you don’t have to first establish a brand, or come up with huge capital. Let’s say that you are a new or aspiring company, with your own product or service to 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 going over budget. In this guide, we’re going to show you how affiliate marketing helps and 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 a similar concept to “commission” in that you reward one or more affiliates according to an agreed upon arrangement, such as how many visitors or customers they bring 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 affiliate marketing) 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, from management agencies and various other third parties. However, the formula does remain 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 marketing certainly obscures the differences, and the challenges unique to both markets. First, understand that affiliate marketing predates the boom of the Internet (if not Internet technology). Revenue sharing principles first originated with government entities, and eventually spread to commercial companies and production companies. For instance, the Nixon administration and the early NFL were using revenue sharing concepts long before television affiliates, who were long before Internet marketing! However, since the mid-nineteen-nineties, much of what we now know as revenue sharing 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 entire neighborhoods, pressure family and friends and go door to door like a pushy salesperson. 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 press releases 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 a small to mid-sized company that wants to try affiliate marketing online or offline, this doesn’t mean that you should use it. In this section, we’re going to discuss the pros and cons of using such a program, and who ideally the system benefits. First, consider the most obvious advantages of using an affiliate network to boost your income. Very Low Capital (using an affiliate program does not require a large marketing budget. 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; they help you to promote your products on your behalf and earn commissions on every item 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 paying underachieving employees as well as overall office costs) Flexibility (You are allowed flexibility when you pay your affiliates; you can choose the result that earns payments; if you are convinced you’ve made the sale when a person 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 up with a quality affiliate program you can often times receive free website traffic and better search engine rankings for your content. Additionally, the automatic functions provided by computer software simplify the process. Thus you are given more time and money to expand your business elsewhere. If you have saleable products or services but can’t devote greater time and resources to advertising, then maybe it’s time to look into an affiliate program. This type of program works better when the products/services are proven and marketfriendly items. Note that some affiliate networks also charge anywhere from $500 to $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 first time. 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 the affiliate and is earning commission based on results. The “Affiliate Link” refers to a URL tracking link that identifies the affiliate and sends traffic to the original site. These allow you to track where the traffic is coming from and who deserves the credit. Next, consider the importance of affiliate software, which helps you run and manage this important program. Without automated software, 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 and the sight of these ads are worth) Unique Clicks (this only counts unique clicks from each visitor, and involves tracking 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 and logo. Tracking code refers to the HTML you must insert into each page so that you can track your results. The “affiliate manager” is in charge of tracking all affiliate program data, including sales, purchases commissions and other related information. Ways to Grow your Business with Affiliate Marketing There you have the gist of what makes affiliate marketing work. However, you may still be asking, what are the methods that lead to results and profit? Search Engine Optimization works very well, as it provides pages of content and attentiongrabbing “landing pages” that keep buyers’ interested. In addition, publishing new content on a website, sending company newsletters through email, publishing regular blogs on an appropriate product, and social media interaction can also boost interest too. Allow your affiliates to use their resources, creativity and motivation to help sell quality 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
night. However, if you have patience and can strategize over a period of time (as you have been doing) then you will find that affiliate marketing works phenomenally. To succeed, be sure to work with affiliates that use fair online or offline tactics, so that you can distance yourself from the fraudulent “anti-marketers” in this industry. Take the time to ensure applicants meet your requirements and monitor their activity (which you can do with cutting-edge new software. Once you understand the basics of affiliate marketing, you will be selling four, five or one hundred times the product that you currently turn over!