Be an Affiliate and Earn Big Bucks with Just a Click of the Mouse

By: David Urmann

Affiliate marketing is a proven marketing scheme that gives merchants great savings on advertising by utilizing the publisher’s website. The scope is virtually unlimited. Anything can be sold over the Internet.

Affiliate program is also known as associate program, referral program, partner or revenue sharing program. It is a type of marketing where a merchant pays an affiliate for web traffic, leads or sales on a Pay-Per-Sale, Pay-Per-Click, or Pay-Per-Lead basis.

Affiliate marketing, on the other hand, is a program intended for website publishers or owners to earn commissions by promoting or selling merchant’s products or programs or services on their websites. Its success is greatly due to the increasing volume of people who trusted the internet in making purchases, banking, and other business transactions online.

Associate program is one of the most rewarding and fastest growing Internet-based businesses. A business rewards its affiliates with commissions for every visitor or customer produced by the associate’s marketing effort. Affiliate marketing gives everybody a chance to earn money through the Internet by simply promoting several products or programs.

Compared to a traditional business, an affiliate marketer requires minimal overhead to start with his own business. He could also provide jobs for people who want to earn extra income. Setting up this business is quite easy. There are thousands of associate programs in the internet, and countless means to promote these programs.

Affiliate marketing is also the industry which many different types of individuals or companies are employing this marketing strategy. These companies include affiliate management companies, affiliate networks, specialized 3rd party vendors, in-house affiliate managers, and several types of publishers/affiliates who advertise the services or products of their partners. Affiliates sometimes utilize less orthodox schemes like publishing reviews of services or products offered by merchants.

Online marketing using one website to direct traffic to another site is usually neglected by the advertisers. Although search engines, website syndication, and emails got the attention of retailers, affiliate marketing imparts a relatively lower profile. But affiliates remain key players in online retailers’ marketing techniques.

The e-commerce website slowly became known and integral in the business world. In fact the e-commerce industry surpassed the number of offline businesses. Report showed the total revenue generated by affiliate networks in 2006 reached £2.16 billion worth of commissions in UK. It is estimated that affiliates around the world earned US $6.5 billion in commissions in 2006 from various sources such as:
• gaming and gambling
• retail
• personal finance
• travel
• telecommunication
• education
• publishing
• lead generation.

The current most prolific sectors for associates are gambling, adult, and retail. Mobile phones, travels, and finance sectors are expected to perform well and have achieved the greatest growth. The entertainment, specifically gaming and Internet-related services like the broadband are active too.

Compensation Methods

I. Predominant Compensation Methods

Eighty percent of affiliate programs apply Cost-Per-Sale (CPS) or revenue sharing as method of compensation. Nineteen percent utilize Cost-Per-Action (CPA), and other programs use Cost-Per-Click (CPC) or Cost-Per-Mile (CPM).

II. Diminished Compensation Methods

Lower than one percent of traditional associate marketing programs employ Cost-Per-Click and Cost-Per-Mile. Even so, these methods are heavily utilized in paid search and display advertising.

Cost-Per-Mile needs the publisher to advertise the products or services on his website and display the advertisement to his visitors. Pay-Per-Click involves one more step in the conversion process. A visitor should click on the advertisement to view the advertiser’s website.

Cost-Per-Click was used widely before the booming of affiliate marketing, only to diminish in use because of the “click fraud” issue. The publisher is not after a visitor being part of the audience. The advertiser attempts to attract and convert. The risk is left with the advertiser once the visitor is not converted, and the publisher has easily earned his reward.

Cost-Per-Action (or Cost-Per-Sale) is the amount of commission for a conversion such as a successful sale or lead. It requires the referred visitor to be converted first before receiving the reward. The risk and loss is equally shared by the associate and the advertiser.

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