An Overview of Affiliate Marketing
There are many different ways that you can effectively market an online business to increase your websites traffic. Affiliate marketing is one of the many ways that companies can accomplish that.
Affiliate marketing is the practice of a business rewarding affiliates of their business for bringing in new leads or traffic to the companies website. Although affiliate marketing overlaps to a certain degree with other forms of Internet marketing like, SEO, e-mail marketing and display advertising it can be very effective when used properly.
Affiliate marketing uses one website to drive traffic to another website, through the use of related Internet marketing techniques like, SEO, e-mail and display advertising. The primary company or website compensates individual affiliates of that company or website for their marketing efforts.
Typically that compensation comes in the form of revenue sharing or cost per sale. This means that any profit that is derived from traffic that the affiliate has brought in results in that affiliate receiving a percentage of that profit. This can be an extremely cost effective way for companies to drive traffic to their website and earn extra revenue on affiliate fees and leads.
The benefit of affiliate marketing for a business is that it typically does not cost them anything unless they have to pay out revenue to the affiliate when they bring in a sale. In the event of an affiliate sale the company is paying a percentage of that sale to the affiliate, but they are profiting as well. Many companies consider this a small price to pay for a lead they may not have generated on their own anyway.
The primary problem with running an affiliate marketing program is the management of the affiliates. When a person is recruited as an affiliate of your company they are representing your company and you don't want them to do anything that may represent your product in a negative way. It is important to adequately train your affiliates so that they understand what type of conduct is expected of them and what forms of marketing are acceptable. You don't want affiliates who are representing your company spamming people or keyword stuffing to rank high in search engine result pages.
Many companies operate their own in-house affiliate programs, while others employ the services of a third party intermediate to track and mange their affiliates. Companies who wish to use a third party intermediate for management of their affiliate program can choose from stand alone software programs or an actual hosted service called an affiliate network. Affiliate programs require regular maintenance and work to be successful, which is why it is essential that they are managed properly.
Affiliate marketing is one of the most overlooked Internet marketing tools available. Despite the fact that search engine optimization, e-mail and RSS feeds are more widely used, affiliate marketing can still play a significant role in a companies business strategy. When set-up and managed correctly an affiliate marketing program can be more profitable than any other from of Internet marketing.