What is Affiliate Marketing?

What is Affiliate Marketing?

Affiliate marketing is internet marketing that allows websites to share traffic and revenue using banner and text advertisements. Merchants who sell goods and services online pay commissions to website owners (Affiliates) for sending traffic to their site. Affiliates can earn and are paid commissions when one of the following events occur:

Click thru: A visitor to the Affiliates website clicks on a Merchants banner and visits the Merchants website. This payment structure is referred to as - cost per click (cpc or ppc).

Lead: A visitor referred by the Affiliate completes a form on the Merchants website. This is payment structure is referred to as - cost per lead (cpl).

Sale: A visitor referred by the Affiliate purchases goods and services from the Merchant. This payment structure is referred to as - cost per acquisition (cpa).

Paying for results means risks are small for the merchant, but possibilities are big for you if you invest effort and skill to develop targeted traffic. There are no guarantees about what you can earn, however, that also means that there are no limits either!

The key to being a successful affiliate is to send targeted traffic to the merchant's site. This means that if your site is about billiards then a gardening advertisement wouldn't be a good choice, a sports oriented merchant and links would be, of course the best. This may sounds easy to you, but it many affiliates put banners in to a rotation script on their site and expect to make major money, being an affiliate means that you'll need to be creative in your presentation of the link (s) and frequently update your merchants and links.

The principles of affiliate marketing are pretty easy… A merchant who wants to sell more may decide to offer an affiliate program. Using this affiliate program he will attract webmasters of other sites, so called publishers, who are willing to sell or promote the merchants product on their site. In exchange the webmaster who promotes the merchant or sends him a sale gets a commission. The handling and shipping is all taken care of by the merchant, basically you only send him a new customer or prospect.