Affiliate marketing is an internet-based form of performance-based promotion where a company compensates one or more affiliate marketers for each visitor or client brought about by the affiliate’s marketing efforts. In simple terms, affiliate marketers (also known as advertisers) market a product or service offered by another company and collect commission based on the action of their visitors. The action may be buying or signing up for the given program. They receive their commission when they direct visitors to the product’s sales page or the company’s website. They can also receive payment if they bring a lead to the company’s website or convince someone to make a purchase.
While affiliate marketing is very popular with companies that have an established product and market, it can also benefit anyone with an interest in promoting other people’s products or services. Affiliate marketing allows marketers to reach target audiences via the internet without a large investment in advertising. With the internet’s wide array of audience and geography, marketers can readily target certain audiences via email, blogs, and social media. They do not need to spend significant budgets to advertise to these targeted audiences because the process of affiliate marketing involves relationship building and the exchange of information or traffic between marketer and audience.
Digital marketing is one of the fastest growing forms of affiliate marketing. Digital marketing allows marketers to reach markets that traditional marketing cannot. They use digital media such as videos, podcasts, eBooks, images, and other interactive tools to capture the attention of prospective customers. These digital tools allow the marketer to persuade and inspire consumers to take certain actions. Some of the common digital marketing tools used include:
YouTube is one of the most prominent websites that uses video as a form of digital marketing. The videos posted on YouTube are generally produced by affiliates of the marketer. Most of the time, marketers will host the video themselves or pay an outside company to do so. As video becomes more popular, the amount of affiliate videos posted on YouTube increases dramatically, creating a significant amount of exposure for marketers. Because YouTube is free to use and has millions of viewers, it is one of the best places for marketers to advertise their businesses.
Google’s AdWords is another popular website used for affiliate marketing programs. Because Google is one of the most popular search engines in use, it is very likely that consumers will type some type of phrase into the search box that is related to the product or service offered by a marketer’s affiliate. Once this happens, the marketer will display ads on search results pages that are clicked by consumers. When people click on these ads, they will be directed to the affiliate marketer’s website where they can learn more about the product or service. Over time, an affiliate marketing program can lead to substantial revenue.
Another way to make money online through an affiliate marketing program is through digital marketing. Digital marketing refers to any promotional method that uses electronic means, such as radio, television, or the internet. Digital marketing can be useful because it is not dependent on one medium, which can limit the marketing effectiveness. By using multiple digital marketing tools, a marketer can reach a broader audience.
Because of the nature of affiliate marketing, it is important to understand the commission structure. Commonly referred to as the “barter” structure, commission rates range from one percent to ten percent. Commission structures can be structured on a monthly, quarterly, or annual basis. Most revenue sharing arrangements have a specific date when payments should be made. Many online merchants and affiliates prefer to pay their affiliates on a daily basis, but there are also marketers who prefer to pay their affiliates only when the transaction is complete.
Affiliate programs may be a good way to start your business, but understanding all the terms and how the commission and payout work is absolutely essential. Before signing up for an affiliate marketing program, make sure you know what you will be paying for and whether or not you will be getting enough in commissions to cover your setup and maintenance costs. Pay-per-click advertisements can be costly, but with a good affiliate marketing program and a good pay-per-click advertising campaign, you can easily generate income.