A short introduction to affiliate marketing
Affilliate marketing is a type of online marketing where the online store (advertiser) pays the affiliate (webmaster) for every lead or sale generated via their website. The affiliate programme is a way for the advertiser to increase sales by directing traffic to their website. Afilliate marketing is efficient, because it offers the possibility to operate according to a “no cure no pay” principle. Only when a sale is generated through the affiliate programme, the online store pays a certain amount of money to the webmaster.
An affiliate advertisement may appear in multiple forms. You probably know the annoying pop-ups and the eye-catching banners. A subtle link at the bottom of a text can also be an affiliate’s.
There are 3 parties engaged with affiliate marketing
1. The advertiser
2. The affiliate (you)
3. An affiliate network
How do I get affiliates?
This is where the affiliate networks come in. You can join one and they take care of tracking and arrange payments. Some of the leading affiliate networks include LinkShare, AvantLink, CJ, and ShareASale.
1. Visitor visits affiliate website
2. Visitor clicks the link to your online store
3. Visitor buys a product
4. The network makes sure the affiliate gets his compensation
Pricing and Payment models: CPC, CPC, CPM, Lead and Sale
If you launch a program with an affiliate network, you can expect to pay a one-time set-up fee for the integration into the network and a percentage of the commissions. When comparing affiliate networks a third costs criteria is a possible fee for contacting affiliates. There may be fees for contacting “non-joined” affiliates.
CPC: Cost Per Click. You pay for every visitor 0.01 to 0.50 EUR (0.01 to 0.70 USD / 0.01 to 0.40 GBP)
CPM: Cost Per Mille. 1.000 showings of a banner. 0.20 to 4.00 EUR (0.30 to 5.50 USD / 0.15 to 3.30 GBP)
Lead: Subscription for a news letter or website. 0.50 to 3.00 EUR (0.70 to 4 USD / 0.40 to 2.50 GBP)
Sale: Per sale. 3.00 to 50.00 EUR (4 to 70 USD / 2.5 to 40 GBP)
Nowadays online store almost only pay for leads or sales. I advise you to do the same!