free advertising free advertising

What is Affiliate Marketing?

Affiliate marketing means you are connected with a merchant and their products. These retailers will pay a commission for your promotional services, which generally include advertising their product or your website. Advertisers prefer this process because they only pay a commission when there is a purchase, thereby reducing advertising costs. Publishers (website owners) find this type of marketing attractive because there is no inventory, shipping, or billing hassles to contend with.
A few requirements:
  • A website with traffic (200 unique visitors per day)
  • Your visitors must trust you
  • Products must be high quality
  • Your visitors must be willing to make a purchase

Thi type of marketing consists of four main components:
  • Retailer (merchant)
  • Network (product listing, payment processing)
  • Publisher (the affiliate, website owner)
  • Customer

Affiliate marketing originated in 1989 by William Tobin. Tobin's businesses included over 2600 affiliate marketers by the year 1995 and have grown consistently every year. Mr. Tobin has patented affiliate marketing and tracking in several countries worldwide. Mr. Tobin has authored "Confessions of an Obsessive Entrepreneur" where he discusses the patents and licensing of the largest marketing companies in the United States and Japan.
Other Internet marketing methods may include:
  1. Display advertising
  2. E-mail marketing organic search engine optimization (SEO)
  3. Search engine marketing (Pay Per Click)

Online communities, blogging, and interactive websites have had an increasing impact on affiliate marketing. This concept (Web 2.0) has allowed the communication between the affiliate and merchant to improve. Web 2.0 platforms have enabled personal bloggers, website owners, and writer's full access to affiliate marketing programs such as Google, Amazon, and Link Share. E-mail marketing, newsletters, and YouTube also can be used as affiliate marketing avenues.
Compensation methods:
  • Cost per click (CPC)
  • Pay per sale (PPS)
  • Cost per action (CPA)
  • Cost per mille (CPM)

Although we don't believe Click Bank, Amazon, Google and Commission Junction will drastically change their policies anytime soon, they do adapt and tweak their affiliate structures regularly. Some experts contend the affiliate may be in the process being phased out completely by the larger retailers. Although we're convinced eliminating the middleman has always been the retailers ambition, practically speaking they would be hard pressed to justify it economically.
Although Google makes it's presence felt daily in a ever revising the internet role, most believe today's marketer will exhibit continued creative resources for profitability.
Panda updates and Web 2.0 are not exclusive to the past, this is just the start.