Affiliate Marketing

What is it?

Simply defined, affiliate marketing is using affiliates (or marketing agents) to promote websites or products. In general terms, this usually means that an affiliate website will have banners or links to another website, promoting their products. When a visitor clicks on the banner or link, they are taken to the merchant's website. If the visitor then goes on to purchase a product, the merchant will pay the affiliate a commission. Amazon is a good example of a merchant that uses affiliate marketing. How many banners and links have you seen on other websites, advertising books with a link to Amazon?

Benefits to the Merchant

1. Low cost - There are many programmes available for even small merchants to join whereby they can quickly recruit affiliates (details later on). There is usually a small setup fee, and the merchant will have to make some changes to their site to incorporate the tracking, i.e. so that they can link a sale to an affilate referrer. From then on, the merchant simplay pays a small percentage of the profit on each of these referred sales to the affiliate. No expensive ongoing marketing costs - the merchant only pays commission on sales they would not otherwise have achieved.

2. Extra sales - The merchant gains extra sales through little or no extra ongoing work, as the affiliates are doing the marketing.

This is a very simplistic explanation, and as we'll see later, there are isues and complications on both sides.

How to be an Affiliate

Being an affiliate doesn't necessarily need much technical expertise. If you can create basic webpages using Frontpage or Dreamweaver you can join the club. Being a good affiliate though, is another matter.

The internet is pretty crowded with useless sites with duplicated information, some of which is outdated or incorrect, and all competing for the same visitors. That doen't mean you can't throw up another site about travelling to Peru and get some visitors, but it is worth trying to diferentiate yourself. The oft quoted advise is to build a website about a subject that interests you. If you put time and effort into creating a site around a subject that doesn't, after the first or second wave of enthusiasm, when the anticipated visitors haven't arrived, your enthusiasm will wain, and your site will suffer from lack of new material. A good site needs a motivated contributor who can keep up the process, week after week, month after month. Your best customers are repeat visitors. If your landing page stays the same, month after month, visitors will asume that the whole site has no new information on it, and will not be attracted back.

When choosing a site to start with, consider the existing and potential future competition. Why should visitors want to browse your site rather than another? Do you have some unique information, style or viewpoints that would make your site stand out. Don't worry to much about which merchants you are going to promote and how much income you will make at this stage. All that is irrelevant if you can't get and maintain visitors to your site.

How to keep your content fresh

Visitors and search engines like to see fresh information and regularly updating pages. Think about it, would you buy a newspaper, if the headline today, was the same as yesterday? Updating information regularly is however a lot of work. If you are not that technical but you want to keep adding articles or pages to your site, consider getting a Content Management System that will make it easy for you to add new text to your site without any technical involvement.

Another way is to include a Blog. A blog is basically a journal (or web log) kept on the internet. It could be a daily summary of events that happen to you or your company, or thoughts or views you have. The important factor, is that you are updating regularly, perhaps even daily, and visitors are encouraged to come back soon to read more.

Depending on the context of your site, it may be applicable to include news snipets relevant to the subject. It's possible to get dynamic news headlines included on your site using RSS or javascript. This needn't cost you anything, but can provide content for your site, that needs no interaction from you. For more information check out http://news.yahoo.com/rss/ and http://w.moreover.com/categories/category_list_rss.html

Getting Visitors to your Affiliate Site

There are a few ways to attract people to your site, so we'll provide a quick overview of the common ones.

SEO - Search Engine Optimization

This is also known as 'organic' marketing and primarily consists of optimizing your website so that Search Engines, such as Google, Yahoo & MSN show your site high up in their indexes and thereby send visitors to you. This has now become pretty difficult for most sites, especially new ones, as historically, search engines have appeared to give prominance to large sites that have been inexistence for some time. Getting your site on the first page of a search engine for most popular terms is pretty unlikely for a newbie, however that doen't mean you should exclude this form of marketing - just don't put too many eggs in this basket. (more)

SEM - Search Engine Marketing

This is characterised by PPC (Pay per click) and usually involves paying a Search engine to show your website in an advertisement. For each visitor who clicks on the advert and is sent to your site, you will then pay the Search Engine a small amount. This can be a very effective way to get visitors quickly to your site, but can also work out expensive, particularly for very competative terms such as 'insurance'.

Link Exchange

By placing a link on your site to a 'friendly' site, and them reciprocating, you can get visitors directed to your site from theirs. Wheras this used to be a very popular method, I can forsee this becoming less important due to overuse. When it became well-known that Google as one Search Engine, placed great importance on how many 'incoming links' there were to a site, and used this to influence how high it would place the site in its indexes, many websites went on a mission of link exchange with as many sites as they could, even employing people whose sole occupation was to exchange links. This has now led to many sites with pages and pages of irrelevant links, some of which will never be seen by visitors, but are designed to be indexed by the search engine robots.

Earning from Adsense

One of simplest ways to start getting an income from a website without actually selling product is to include adverts from other sites. Rather than contact such sites and asking if they would like to advertise with you, you can use Adsense from Google https://www.google.com/adsense/ to automatically place adverts on your site in positions you specify. The advantage of doing it this way, is that the advert placing and updating is done automatically needing no further interaction from you. The disadvantage is that you don't neccessarily know exactly which adverts will be shown. You will earn a small commission every time a unique visitor clicks on one of the ads and is directed to the advertiser site. Another disadvantage is that the visitor is taken from your site to another site, which may even be a competitor. The programme does allow you to restrict certain competitor's ads if required. An example of the adverts is shown below. Notice how Google automatically attempts to choose adverts that are relevant to the page they are shown on...

Merchants who want to do well with Affiliate Marketing

Treat your affiliates as proper business partners. Some of them could in time become your best sales agents.

Pay your affiliates on time

This goes without saying, but some merchants still try to avoid paying, or delay payment uneccesarily. Make sure you have the proper processes in place to action payments promptly and accurately. Merchants who fail on these quickly get a bad reputation in the affiliate industry.

Provide Unique Selling Propositions and/or Marketing Material

Give your affiliates a good reason to promote you. In the same way that you can attract or incentivise your potential customers, you can also increase sales by providing good tools and marketing for your affiliates. Attractive marketing materials or advertising copy, dynamically changing special offers and seasonal promotions will help the affiliate to keep your proposition fresh. Many products are in a crowded over-advertised market. Make it easy for your affiliates to promote you rather than your competition.

Don't try to take sales away from your affiliates

If you treat affiliate marketing seriously and want to attract the best marketeers, include processes for tracking the sales offline. By this, I mean, if a customer is directed to your site by an affiliate, and then instead of completing the selling process online, is directed to complete the sale by telephoning you, will that sale be attributed to the referring affiliate? Some merchant try to use this as an excuse not to pay commission to the affiliate, and some merchants even go as far as to try to force a percentage of sales to be completed this way. Good affiliates will cotton on to this pretty quickly, and the merchant's reputation will suffer.

There are reasons in a some cases why customers may need or want to complete a sale on the telephone but that doesn't mean you can't track the affiliate. Some merchants provide a unique telephone number for each affiliate website, which makes it easy to see who referred the sale. This doesn't make sense in all cases, but multiple telephone numbers are pretty cheap nowadays. Other ways to track a referrer would be to tell the customer to quote a unique reference when they call - which would unbeknownst to them contain an affiliate id.

Communicate with your affiliates

By getting to know your affiliates, you will understand further how you can improve your offerings to them, to make their life easier with a view to increasing their's and ultimately your business. Good mechants will be prepared to put in the time to find out what their affiliates do and don't like about them or their site.

Don't compete with your Affiliates

An obvious one this, but it still amazes me how many merchant sites have affiliate links of their own on the site that they are expecting other affiliates to direct visitors to. This shows little respect for your affiliates and any affiliate worth his or her salt will stay well clear.

Datafeeds issues

Setting up a datafeed is actually pretty simple to do, but taking care to make sure it works well will reap big benefits. Affiliates don't have the time to filter through invalid records, corrupt links, missing pictures or incorrectly categorised products. It's your datafeed - make sure it's clean! Again, by making less work for your affiliates, they can get on with the job of promoting your products, rather than duplicating basic house-cleaning that you should have done yourself.

Resources

Affiliate Merchants

Amazon are one of the most well-known and biggest online merchants using affiliate marketing to improve their sales. They include a number of tools for affiliates making it easy to show relevant or specific books with an image and price on the affiliate site with a direct link to Amazon. Visitors clicking on the link and purchasing will net the affiliate a small commission.

Amazon.com

Amazon.co.uk

Affiliate Networks

Affiliate networks have sprung up to facilitate merchants finding affiliates and visa-versa. By registering with the network, the affiliate will have access to many merchants who are keen to use their websites to help market their products. The affiliate network will usually take commission for each sale that goes through their network, so there is no cost to the affiliate and purely a direct cost on new sales generated for the merchant.

Affiliate Future

Affiliate Window

Affiliate Information & Forums

A4UForum

Conclusion

Affiliate marketing has benefits both to website owners and merchants, and can be seen as a win-win situation. Customers don't pay any extra for the products, merchants don't pay any continous marketing fees aside from that directly taken out of new sales, and affiliates can earn income purely by operating a popular web-site, with no need to directly fullfill any customer orders.

All of this isn't without potential problems though. Affiliate marketing has encouraged the increase of 'spammy' websites, set up to provide no value apart from redirect visitors to merchants, in some cases of an irrelevant nature to the wishes of the visitor. This can also cause problems for some merchants who may find that there are thousands of competing websites all offering visitors the merchant's own products, and visitors searching for the merchant by name may inadvertantly go via an affiliate site, lessoning the profit for the merchant. There are many factors for a merchant to consider when going down the affiliate marketing route, but it can be very successful when conducted correctly. Correspondingly, there are many very successful and reputable affiliate marketeers who make a good living from encouraging their own website visitors to specific merchants sites.

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