What is affiliate marketing?
Affiliate marketing is about paying for performance. In short, it is a type of marketing in which one merchant induces others to place banners and buttons on their Web sites in return for a commission on purchases made by their customers.
Amazon.com is the pioneer of affiliate marketing. It allows other Web sites to publish information of their own choices of books. When people click through to Amazon and buy these books, the Web site in question gets a commission. Affiliate marketing can open up new channels to market for the affiliate sponsor, and be a source of extra revenue for the affiliate Web site. When investigating affiliate marketing, consider:
- affiliate marketing is more suited to products than services;
- you’ll need to work hard with your affiliates if you want it all to work;
- a well-designed compensation package will be critical to success.
Is your business suited to affiliate marketing?
- There needs to be a substantial number of Web sites that are attracting your target market. These Web sites need to show a willingness to join an affiliate program. You might be selling medical supplies but that doesn’t mean that hospital Web sites will become affiliates.
- Affiliate marketing is better suited to products than to services. It is much harder to track whether another Web site sent you visitors who, after prolonged negotiation, decide to pay you for your services.
- Is the market already saturated with affiliate programs? It would be difficult to set up an affiliate program today that offered commission on book sales.
Have a strong value proposition
As with all good ideas, there are a huge number of merchants offering affiliate programs. How is your program going to attract new members? The level of compensation/commission you will offer will be important. However, on its own it will rarely be enough. You will need to work hard with your members by organizing regular competitions, special offers, and other incentives that make for an attractive value proposition both for your affiliate members and the end customer. ... click here to read the rest of the article titled "Affiliate Marketing on the Web"