What Is This Thing Called Affiliate Marketing?

Posted on July 21, 2008
Filed Under E-Commerce, Training | 1 Comment

I am starting a new series today on Affiliate Marketing. These articles are geared towards the novice or “newbie”. There will be one posted each day for the next five days. Feel free to leave your comments.

What is This Thing Called Affiliate Marketing?

Affiliate Marketing is a way of promoting online business through affiliate programs and advertising that pay the affiliate (or publisher) a type of commission based on the amount of business their website brings the merchant company.

It’s a form of revenue sharing or commission based advertising. The term “affiliate marketing,” however, is often associated with network marketing or multi-level marketing and therefore many companies prefer to use the term “performance marketing”. Affiliate marketing is the most cost effective sort of marketing there is, and is actually incredibly efficient. For this reason, many companies (especially those that started in the early days of e-commerce) owe a tremendous amount to affiliate marketing (amazon.com is a good example) and it has now become normal for companies to include affiliate marketing in many of their plans.

There are three types of compensation methods that are associated with affiliated marketing. The first type is Cost per Click (CPC) or Cost per Mil (CPM.) Basically, the affiliate earns by how many clicks the advertising on hisher site generates, or by just having the advert published on the website. But because of click fraud and many other questionable tactics, CPC is no longer the general form used for affiliate marketing. Generally, companies now either use CPA (Cost per Action) or CPS (Cost per Sale.) The first is based on how much the advert generates interest by the clicker to actually buy or register at the advertised site, the second is based strictly on sales. In other words, an affiliate is paid if the clicker actually purchases something on the advertised site.

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Comments

One Response to “What Is This Thing Called Affiliate Marketing?”

  1. Willy Lim - InterNETwork Marketing in Asia on July 21st, 2008 9:53 pm

    The line between affiliate marketing on the internet and network marketing is blurring. Nowadays network marketers also use online internet marketing techniques to build their off-line network marketing business.

    Willy Lim
    The Financially Free Advisor
    InterNETwork Marketing in Asia

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