Affiliate Marketing – Definition & Importance
By<b> Affiliate Marketing Definition
Affiliate Marketing is the activity which happens as a result of an association between two actors – 1) the Merchant (sometimes called the advertiser, or partner), and 2) the Affiliate (aka the publisher). If we think about the Affiliate Program as a whole, we must take account of an additional player, the Customer, as well.
The Merchant makes available the product for purchase, and the Affiliate works to sell that product for the merchant and/or drive traffic to the merchant’s site. In return, the Merchant agrees to pay the Affiliate a commission for sales and/or agreed upon performance measures.
Payment Arrangements
Payment plans are normally performance-based (which is a form of risk mitigation by the Merchant) and arrangements are commonly structured as Pay Per Click (PPC), Pay Per Sale (PPS) and Pay Per Lead (PPL) – or some combination.
Affiliate Marketing Classes
If we separate affiliate marketing in terms of depth, we have amoxil clavulin three different classes: 1) single-tier, 2) two-tier and 3) multi-tier programs.
Single-Tier Affiliate Marketing Programs
In Single-Tier Affiliate Marketing, the Affiliates get the commission, only for driving visitors or sales to the merchant’s website. Pay/performance and pay/click fall under this category.
Two-Tier Affiliate Marketing Program
In Two-Tier Marketing, the Affiliate gets paid commission for every action performed by his direct referrals, plus he gets the commission when one of those people he’s personally referred gets compensated. Thus, there are two levels to his commission plan and the Affiliate earns both directly and indirectly.
Multi-Tier Affiliate Marketing Program
Multi-Tier Affiliate Marketing is very similar to Two-Tier Marketing, but here, the Affiliates get the commission for the sales made by their affiliated affiliates in multiple, unlimited, levels.
Residual Income Marketing
In Residual Income Marketing, the Affiliate marketer is paid for every sale that is made by a person referred by him.
In this type of marketing, Affiliates get the commission for every sale that his referral makes at the Merchant’s website. In order for this to work properly, the first time, the person should come from the Affiliate’s pre-defined affiliate link. Then, whenever the same person returns to the Merchant website (even without using the affiliate link), the Affiliate will get paid for every sale performed by the visitor.
Cookies make this strategy work. A “cookie” is placed on the first-time visitor’s computer. This cookie reflects the affiliate id of the Affiliate. Cookies usually expire after 3 months; however, some may persist beyond three months.
Whenever a visitor visits the Merchant website, the visitor’s computer is checked for any previously created cookie. If a cookie is found, the affiliate id is retrieved from it and the Affiliate gets credited for any purchase made by the visitor.
Win-Win-Win
As long as the affiliate marketing relationship is well-planned and well-executed, everyone wins:
The Merchant gets greater visibility and market penetration, attracting customers that would otherwise be outside the Merchant’s market reach.
The Affiliate earns a commission for online sales, without needing to establish a full e-commerce site or having to manage inventories and fulfill orders.
The Customer learns about, and can readily access desirable and useful products that s/he would otherwise not find – at least not easily.
Good Affiliate Marketing is a Win-Win-Win situation.
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