Affiliate Marketing is simply a kind of performance-based advertising in which a company compensates one or more affiliates per visitor or client brought about by the affiliate’s marketing efforts. The word “affiliate” derives from the word ” Associates “which means workers”. There are no employees in affiliate marketing and all the work is done by independent contractors. Affiliates are rewarded only for sales, not for leads or hits. The compensation is fixed and cannot be influenced in any way. Therefore, the entire concept of affiliate marketing is completely B.S.C. (built-in to the Marketing system).
However, this doesn’t mean that affiliate marketing is without its problems or limitations. For example, in a network market like MLM, where there is little or no product-to-demand competition, the power of the cost per sale, or CPS, is crucial for affiliate marketers as it determines the revenue potential and profitability of their enterprise. The commission payment rate, known as the payout percentage, also determines the amount of revenue that the merchants get from the affiliate. Thus, affiliate marketers may have to take a cut from the revenue in order to fulfill their contract with the merchant.
On the other hand, most internet marketing strategies do not make use of the CPS approach and thus, the affiliate marketing strategies are relatively ineffective. This is the reason why most of the affiliate marketing campaigns fail in the beginning. Affiliates should acquire some basic marketing skills before trying to promote a product or service. This can be achieved by attending online training courses or reading e-books related to Internet marketing. By acquiring adequate knowledge about advertising methods, creating compelling sales messages, implementing good tracking and testing techniques, and following an efficient sales creation process, an affiliate marketer can easily learn and implement successful affiliate marketing strategies.
The success of the affiliate marketing campaign usually hinges on the number of sales that the marketer is able to generate through the efforts of his affiliates. The commissions, which are paid to affiliates depend on a wide variety of factors such as the popularity or reputation of the product or service, the quality of the web pages which feature the products or services, and the number of clicks made on the affiliate landing pages. The commissions which affiliates receive are calculated based on the total number of leads that were generated and the conversion rates. These rates are derived through the formulas used by Google, Yahoo, and Bing to compute commission payouts.
Affiliate networks can help merchants achieve more favorable rates in affiliate marketing. For example, through Commission Junction an affiliate can receive a commission rate of twenty percent if his/her effort resulted in the sales of one hundred or five hundred dollars. A high-quality website can result in a commission rate of thirty percent and up. If the website that you promote reaches a certain ranking, then you can expect a twenty percent commission. Thus, a merchant can be assured that his or her affiliate marketing campaign will result in a handsome income.
Other affiliate marketing tactics allow merchants to increase their revenues by taking advantage of the tendency for consumers to buy multiple items. Merchants can make money through purchases from other affiliates. The second method is known as multi-level marketing. This strategy allows marketers to recruit new affiliates who will make money for them by earning commissions on their fellow marketers’ sales.
Pay Per Click (PPC) and Pay Per Lead are two of the most popular PPC programs used today. Through these marketing strategies, merchants can increase the revenues generated by their affiliates by allowing them to post sponsored advertisements on their websites. There are many other affiliate marketing strategies that a merchant may use depending on the type of goods sold and the nature of the business. Examples include cost per click, pay per lead, and pay per sale.
Social media has completely changed the landscape of affiliate marketing. Marketers have now become serious about promoting products and services through social media platforms such as Facebook and Twitter. They use these platforms to gather information about customers and prospects, create customer loyalty programs, and run specials and promotions. A social media campaign can have a tremendous impact on your affiliate sales because it increases traffic, engage users, and encourages sales.