Affiliate Marketing

What is affiliate marketing?
Affiliate marketing is an advertising model in which a company pays a third party to generate traffic or lead to the company’s products and services. Third party vendors are affiliates and commissions encourage them to find ways to promote the business.

Understanding Affiliate Marketing
The internet has increased the popularity of affiliate marketing. Amazon (AMZN) encourages this practice by creating an affiliate marketing program where websites and bloggers will link to Amazon’s pages for reviewed or discussed products in order to receive advertising fees after purchase. In this sense, affiliate marketing is basically a pay-to-follow program, where the sales action is outsourced to a broad network.

Affiliate marketing predates the internet, but the world of digital marketing, analytics and cookies has turned it into a multi-billion dollar industry. Affiliate marketing companies can track relationships that lead to leads and use internal analytics to determine how many turn into sales.

Ecommerce retailers looking to reach a wider base of internet users and buyers can hire affiliates. An affiliate can have multiple websites or email marketing lists; The more websites or email lists an affiliate has, the bigger their network will be. The assigned branch communicates and then advertises the products offered on the e-commerce platform in its network. Affiliates do this by placing banners, text ads or links on their websites or by sending emails to clients. Businesses use advertising in the form of articles, videos, and images to draw audience attention to a service or product.

A visitor who clicks on an ad or link is directed to an e-commerce site. When purchasing a product or service, the ecommerce merchant credits the partner’s account with an agreed commission, which can range from 5% to 10% of the sale price.

The goal of this model is to increase sales and create solutions that are profitable for both the merchant and his affiliates. This system is unique and profitable and is becoming more and more popular.

The Internet and improved technology make it easier to implement the model. Businesses have improved the way they track and pay commissions for qualified leads. Being able to better track leads and sales will help inform how they can improve or better position their products.

Those interested in doing affiliate marketing would benefit from understanding what is involved and the pros and cons. Businesses seeking affiliates benefit from proper affiliate checks and qualifications. Overall, it’s an inexpensive and effective way to promote products and services, increase brand awareness, and grow your customer base.