Free Website Content - Affiliates
Understanding Affiliate Programs
by Sharon Housley
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
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This article may be used freely in opt-in
publications and websites, provided that the resource box
is included and the links are active. A courtesy copy of
the issue or a link to any online posting would be greatly
appreciated send an email to sharon@notepage.net
.
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