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

---

Webmaster Plans To Increase Affiliate Earnings

Affiliate programs are a great way to earn an income... Read More

Affiliate Programs

Are you having trouble creating new product offerings from scratch?... Read More

Top 5 Tips For Frustrated Affiliate Program Marketers

Do you go through affiliate programs like most people go... Read More

Overachieving Your Way to Super Affiliate Stardom

Internet business is a bit confusing especially if you're not... Read More

Big Ticket Items - 6 More BIG Benefits To Selling As An Affiliate

Today, we're going to cover 6 More BIG Benefits to... Read More

Instant Success - Yeh Right.

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

23 Ways To Use An Ad Tracker

The ad tracker was originally developed to provide a record... Read More

Tracking Phone Sales Is Important To Your Affiliates

Today the majority of affiliates are looking for compensation when... Read More

3 Ways to Squeeze Even More Revenue Out of Your Traffic Equaliser Pages

Ever wondered if, apart from Google Adsense, there were other... Read More

8 Reasons To Be An Affiliate Marketer

When I began affiliate marketing I knew only half of... Read More

Why Building Affiliate Websites Are the Way to Go

It seems that everybody is into making money online these... Read More

Choosing An Affiliate Marketing Program

If you are new to affiliate marketing, you are probably... Read More

Webmaster Affiliate Programs - How to Separate the Good from the Bad

More and more people are turning to the Internet and... Read More

Generate More Sales in ANY Affiliate Program ? Part Three

Thinking Outside the square is where we last left off.... Read More

How to Skyrocket Your Affiliate Marketing Revenue in 30 Days or Less

Starting up your internet business as a member of an... Read More

Affiliate Program Marketing: 10 Significant Sharp Ways To Increase Your Affiliate Commissions

Millions of people sign up for affiliate programs, but have... Read More

Discover The Affiliate Program thats Right for You

Are you looking for a profitable Affiliate Program?When you start... Read More

Affiliate Assets -- Discover the 3 Secrets That Will Turn Your Affiliate Link Into a Business

Your affiliate marketing business is just that ? a business.... Read More

Affiliate Income Optimization

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

Affiliate Marketing ? The Comparison Model

The value of an affiliate is nil in a customer's... Read More

7 Ways To Increase Your Affiliate Commissions

Suppose you could launch an online business in the next... Read More

Is Earning Money With Affiliate Marketing A Myth?

Day 1 - What Are Affiliate Programs?Welcome to the wide... Read More

Free Affiliate Marketing Page Pays $755 in Commissions From its First 100 Visitors

Affiliate marketing is an easy way to get started making... 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

How to Easily Increase Your Affiliate Commissions in Two Days or Less?

Clearly, the people benefiting the most from affiliate programs are... Read More

A Unique Opportunity For Affiliate Recruiters

If you're a webmaster, web publisher, or web merchant, chances... Read More

Why Two-Tier Affiliate Programs are Best

When you join an affiliate program or start an affiliate... Read More

How To Become A Data-Feed Super Affiliate

I am not going to describe what a product feed... Read More

Common Mistakes Made by Unsuccessful Affiliates

A vast majority of successful online entrepreneurs are affiliates of... Read More

Top Five Ways to Earn Extra Money Online at Home for Free

Here's a fact: everybody wants to earn extra money. We... Read More

Secrets of Super Affiliate

Most affiliate program owners say 80% of their affiliate sales... Read More

Affiliate Programs - Are They A Business For You?

Many people look at affiliate programs as one of the... Read More

Leverage Your Way to Profits With Joint Ventures

You can't conduct business on the internet for very long... Read More