I have written about affiliates before and told how you can make money by joining an advertising network.
Unfortunately, many people think that affiliate was something you could do when the internet was new and not as overwhelmed with sites trying to sell something.
Some even go so far as to claim that the affiliate is completely dead. But that is not true and here we will find out why it is still a good way to make money.
So what is affiliate marketing?
Affiliate marketing is a branch of marketing where “resellers”, so-called affiliates, help an advertiser to market its products or services.
The affiliate is then paid by advertisers, depending on how much sales it can deliver, commission on mediated sales.
Marketing is thus based entirely on performance and results and is sometimes also called performance marketing.
How it all began
Around the 90’s when the Internet really got underway, many companies also started offering sales and e-commerce broke through.
Inventive market managers began to develop strategies and sales channels to include resellers also on Internet affiliates. Amazon.com was early to offer affiliates commissions for brokered traffic and sales on a broader front.
The ideas for this sales and marketing channel were also developed so that specialized companies were started as early as the end of the 90s to offer this even to smaller players in e-commerce. The first affiliate networks were born.
How it works today
Today, there are many different affiliate networks around the world, some specialized in specific industries and others more general. The affiliate industry, and the principles, are often the same and an explanation of it comes below. But first we will sort out some concepts.
Often e-retailers and companies that sell and can offer services where the purchase is made online.
The agreement and terms that apply between the advertiser and its affiliates. Affects such things as tracking time, traffic conditions and commission.
Affiliates are those who own websites, websites, blogs or social media accounts. An affiliate can of course have several websites or channels where one or more advertisers and their products or services are marketed.
The platform where advertisers and affiliates meet. The affiliate network keeps track of and tracks the traffic and sales that take place with the advertisers, to then register and pay commissions to the right affiliates.
Affiliate marketing in practise
It all starts with an advertiser setting up their affiliate program with the affiliate network, where commissions and terms are stated.
Affiliates then join the program and can then start linking to the advertiser through regular text links or banners on their respective channels.
When visitors to the channels then click on to the advertiser and make a purchase, the commission is registered to the affiliate, provided that it is within the tracking time.
Remuneration and commission
Remuneration may vary from network to network and from advertiser to advertiser. Here are some of the most common benefits that affiliates receive commissions for:
- Sale – Often a percentage of the order value of the purchase that has been conveyed. Can also be a fixed amount when e.g. is about selling subscriptions. Can also be called CPO – Cost per Order.
- Lead – Compensation for e.g. completed registration of interest, connection to newsletter or similar. Called CPA – Cost per Action and is usually a fixed amount per conversion.
- Clicks – Compensation for sent visitors – clicks. More common in the past but still occurs today. Called CPC – Cost per Click.
- Impression – Compensation for ad impressions. It is usually measured per thousand impressions and is called CPM – Cost per Mille.
Remuneration for impressions is more common in traditional ad networks, but there are variations of this in affiliate networks as well.
A variant is called iSale or Post view sale and means that an affiliate can receive a commission on a mediated purchase that takes place after a visitor has seen an advertisement on the affiliate’s channel.
The commission is directly linked to a conversion at the advertiser, but since the model is of a more uncertain nature, it is common for the tracking time and commission to be lower.
Affiliate marketing is based entirely on performance and results, it’s very much about trust and relationships between advertisers and affiliates.
The opportunities for advertisers to control and gradually increase their sales with the help of affiliates make it all both efficient and profitable.
Affiliates can just as easily get increased revenue from their various interests and public channels.