Introduction to Affiliate marketing

Can you utilise affiliate marketing?

This article discusses using affiliate marketing by business with services or products to sell. (There is another side of the business; selling the products and services of others as an affiliate.)

Many successful businesses use affiliate marketing to sell their products/services. In Australia, such companies are Allianz Insurance, engin Broadband.

So, how does affiliate marketing work?

Well, basically you pay commissions to other for leads. Its different from having re-sellers, because with affiliates you manage the sale, the transaction, and the after sales service.

Commission sellers have been around for a long time. The big difference is that the web provides sophisticated ways of tracking the sales process and rewarding those sellers. At its simplest level, an affiliate may just provide a link to your product on their site. The link is tracked, and if a sale results you pay a commission on the sale.

There are many different business models for affiliates. You might pay your affiliates based on click-throughs, inquiries, sales, or page impressions. But firstly you need to decided if you will manage your own program, or use an affiliate network.

Creating your own affiliate network

This will be much more complex process. However, if your service/product is complex, this may work better in the long term as you will have more control over your affiliates.

There are lots of affiliate scripts you can integrate into your website that track track your affiliates, calculate commissions etc. The biggest issue with developing your own scheme is “how will you promote it”. Existing schemes have thousands of affiliates ready to promote your service or products. You’ll need to dedicated resources to online and offline promotions of your own scheme.

Using an existing affiliate network

  • 1. You sign up with an affiliate network to promote your goods/services.
  • 2. You set criteria for the sites that you will accept as affiliates.
  • 3. The affiliates puts a link you have approved on their websites.
  • 4. The link to your site, also includes some tracking code which is sent to the affiliate network.
  • 4. The affiliate program allows some control over how your links are displayed.

Affliates vs Goolge Adsense

Affiliate marketing is the origin of pay per click system now perfected by the search engine companies. In fact, Google Adsense campaigns, where you place text adverts on websites based on content, are very similar in concept to affiliate schemes. The advantages of Adsense is that the adverts are context-sensitive, as Google analyses the text on the “affiliates” website to determine if the advertisement is relevant, in the same way as Google’s PPC adverts appear next to relevant searches in search results. The Adsense model is based on pay per click only, whereas affiliates schemes can use other models, such as pay per sale.

Affiliates vs Banner adverts

Banner adverts are ussually costed as “per impression”, that is you pay each time the advert is shown.

Is affiliate marketing suitable for your business? Ask yourself:

  • 1. Is my product, properly commodotized… is the pricing and offering set and clear. Its difficult to use affiliate marketing for indeterminate products.
  • 2. Who would make a good affiliate? If you can think of a wide group of websites that could offer your products, then you are on the right track.
  • 3. Can we manage the leads. You need to be sure that you can manage the leads.

The future

New affiliate methods are coming. The potential for VOIP and Chat sales from websites are huge. Affiliate schemes are developing allowing you to include Chat and Phone links on your site. Paying per “lead” becomes more attractive when you have real-time contact with the prospect.

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