Understanding Affiliate Programs

Affiliate programs are commonly misunderstood, in order to understand affiliate programs lets start with terminology. For clarification purposes, an affiliate is defined as any "referrer" or website that promotes a product in an effort to earn revenue. A merchant is defined as someone who owns a product and is sharing revenues with an affiliate based on the affiliate's performance. Affiliate programs can drive targeted traffic to your website.

There are 3 basic affiliate programs, though only the first two are commonly used.

Pay Per Click - this is when an affiliate is compensated for sending traffic to the merchant. (AdSense is an example of PPC affiliate program)

Pay Per Sale - this is when the affiliate is compensated by the merchant if the referral generates a sale or purchase.

Pay Per Lead - this is when the merchant agrees to pay for a qualified (or sometimes unqualified lead), which is very uncommon because it is subjective and up to the merchant.

Affiliate websites tend to provide information, entertainment, and content services to their customers. The online merchants sell products, goods and services online. These are programs permitting affiliates to earn money based on the visitors to your site who click through to another's website. Some pay a token amount for the click through and others provide a percentage of sales when a visitor "clicks through" to your site and buys a product or service on the other party's site. This could represent a value added service to your visitors.

Affiliate programs allow you to pay and track incentives from other websites that send web surfers, leads or paying customers to your website. Commissions based on purchases made by traffic sent from the referring website can be paid. Besides a commission, an affiliate can receive a flat fee, or other incentives for all valid transactions it refers that generate a sale or lead.

Be careful that the affiliate's web page is not cluttered with banner ads that may crowd out your link, or that be annoying to customers. Affiliate programs enable affiliates to leverage their traffic and customer base in order to profit from e-commerce while merchants benefit from increased exposure and sales.

Commonly traffic to merchant sites is measured and affiliates can clearly see conversion rates. Meaning, they track the percentage of people they are referring, and how much of it results in earned revenue. If the affiliate finds a very low conversion, they will find a better way to monetize that traffic, quite possibly with a competing merchant product.

In order to be a successful affiliate, the affiliate site needs to either have tons of traffic or target a specific audience, frequently one untapped by the merchant. It has been my experience, the closer the affiliate site content resembles the merchant products, the higher the likelihood of a good conversion rate.

Once you are committed to the idea of affiliates, the next step is to determine the kind of tracking system you are going to use. Sales can be tracked by HTML code, which is placed in a shopping cart or on the 'order confirmation'/'thank you' page, and cookies, which are created after the customers click on a banner ad. Cookie killers have been a problem for the affiliate industry. Software vendors have an advantage over other merchants in that new technologies allow software developers to better control compensation. Vendors can 'wrap' their software insuring that their affiliates are compensated for referrals, even if the customer downloads a trial version prior to purchasing. Buy now buttons in the software have affiliate ids imbedded in the download. Combined tracking systems have more success than those that rely on a single tracking technology.

In order to develop a successful affiliate network, merchants must realize that affiliates spend ad dollars on site, and product promotion. If the affiliate is not compensated fairly they will not remain in the merchants network. The bottom line is that affiliate relationships are partnerships, when both sides feel the situation is fair and equitable the relationship will be a success.

About the Author:

Sharon Housley manages marketing for NotePage, Inc. http://www.notepage.net a company specializing in alphanumeric paging, SMS and wireless messaging software solutions. Other sites by Sharon can be found at http://www.feedforall.com, http://www.softwaremarketingresource.com and http://www.small-business-software.net

sharon@notepage.net

---

Googles Secret Guidelines On Thin Affiliates

Journalist Henk van Ess has caused a flurry of excitement... Read More

Can You Really Make A Substancial Income With An Affiliate Program ?

Affiliate Program are the easiest way to make a substancial... Read More

You Deserve a Check Today

Perhaps the fastest and easiest way to prosper online is... Read More

Super Affiliate Strategies Part 2

If you are an affiliate that is trying to promote... Read More

5 Strategies to Boost Your Affiliate Sales

Are you promoting affiliate products?This article will show you 5... Read More

Are You Building a Business or a Downline?

A common mistake *A LOT* of affiliates make is to... Read More

Unique Joint Venture Twist: Make Huge Profits Even If You Have No Money, No Products, and No List

Would you like to jumpstart your online or offline business... Read More

Commission Junction: the Perfect Affiliate Resource for Niche Markets

There are many affiliate programs you can go to to... Read More

Five Knockout Affiliate Tips

Here are five "hook em in the jaw" affiliate tips... Read More

Dont Even Think About Affiliate Marketing Until Youve Read This - Part 1

You've probably heard some of the affiliate success stories from... Read More

Affiliate Marketing is a Brilliant Way to Begin On-line Marketing

Affiliate Marketing is a brilliant way to begin earning on... Read More

How To Start Your Own Affiliate Program

1. Why Start Your Own Affiliate Program?Multiple web sites and... Read More

Launching Your Affiliate Program Correctly

To any Internet Marketer these days an affiliate program is... Read More

Affiliates: 3 Things You Should Own Though You Dont Own A Product.

1. Your Own web site:Most affiliates put a redirect link... Read More

How To Use Articles To Build Your Affiliate Program

Articles are the perfect promotional tool for your affiliates -... Read More

Overwhelmed at the Number of Affiliate Programs, Help is On the Way

Business is founded by the principal of right contacts, meaning... Read More

10 Sizzling Tips For Affiliates

1. Create an infopacked mini site. Build your mini site... Read More

Adsense: How to Make Money With Ads by Google

The chances are that you've seen "Ads by Google" on... Read More

Your Affiliate Business and Taxes

Starting a home-based business on the Internet is easy you... Read More

Affiliate Product Landing Pages - Three Tactics That Sell

As competition within the online affiliate sales arena rises to... Read More

Internet Affiliate Business: 5 Ways to Grow It Organically

Growing your internet home business organically means there are similarities... Read More

Affiliate Marketing ? How to Start Earning Money Today

If you're new to Affiliate Marketing and your finding everything... Read More

Finding An Affiliate Online Opportunity Program

Never before has it been easier to find an affiliate... Read More

Instant Success - Yeh Right.

Join our affiliate-program and make your fortune overnight.Sound familiar ?How... Read More

A Few Words on Affiliate Team Building

It might have been Vince Lombardi or some other famous... Read More

Joint Venture 101 - The Quickest Way To Build Your eBusiness - PART 1

This article reveal the same techniques that many Internet marketing... Read More

Will the Online Quiz Make the Old Fashioned Printed Quiz Obsolete?

Q. Can you tell me the benefits of publishing an... Read More

How to Monetize a Free Website

For some time now I have been aggressively marketing my... Read More

Free Keyword Research Tools Are Not As Effective as Wordtracker

One of the most unanswered questions online today is, how... Read More

Five Things to Look For to Join Any Affiliate Program!

Here's a really simple way... to find out which affiliate... Read More

Why Top-earning Affiliates Have Their Own Domains And Websites

Many affiliate programs usually provide special web pages for their... Read More

Why Arent You Making a Ton of Cash as an Affiliate?

5 keys to you becoming a successful affiliate:1) HAS THE... Read More

Affiliate Income Optimization

In my time researching the search engines, I've noticed something... Read More