So you have a web site or a blog and you want to earn money from it
by monetizing (adding income elements and/or affiliate links and
banners that generate earnings for you) it. Or maybe you've
developed a product which you feel the world wants and needs, errrrr,
yesterday! The next step is to understand what affiliate marketing
is and where you can go to get involved. If you already have traffic
(visitors) then that's half the battle so we'll be focusing on what
you need to do and just as importantly what not to do so that you're
as successful as you want and deserve.
Most of what's discussed here has to do with the
wants to monetize his or her site through affiliate programs and
affiliate marketing. For those with their own product you'll need as
many "affiliates" pushing your product online as you can. Affiliate
marketing for you is an alternative marketing strategy for your
online business and is by far the most effective solution for you to
move your products to customers over the internet.
This is generally how affiliate marketing works today:
~ The merchant has the product and the webmaster has the visitors,
they work together so it's mutually beneficial to each. Once a
webmaster agrees to the "affiliate terms" established by the
merchant, the webmaster then becomes an "affiliate" of the merchant.
~ The affiliate places the merchants text links or banners on his or
her site. The purpose of the affiliate is to direct the site
visitors to the merchants web site, this happens when a visitor
clicks on the merchants link at the affiliates site and then goes to
the merchants site.
~ Once the visitor arrives at the merchants site and makes a
purchase, signs up for a newsletter or requests a trial product
etc., the affiliate earns an agreed upon commission from the
merchant. We've seen this as low as 20 cents for signing up for a
newsletter, to as high as $300 when a visitor signs up for a year
long satellite contract for instance. In some cases the merchant is
strictly paying for "clicks" to the merchants site which is
generally pennies for each visitor. In this case it doesn't much
matter what the visitor does once he or she arrives at the merchants
site, you basically earned your commission as soon as the visitor
clicked on the link and went to the merchants site.
Depending on the software the merchant is running you could have
access to very detailed statistics such as the impressions of your
banner (how many times it was shown to a visitor), how many clicks
took place on a particular link, when the click took place, how many
sales you've made and of course your total commissions. In many
cases you'll also have access to pre-written text ads, banners,
email auto responder messages and more. Amazon has probably got the
best affiliate marketing tools and back office area, however (and
this is only our opinion) their commissions are comparatively low.
What we've just talked about is affiliate marketing between an
individual merchant and a webmaster similar to if you joined Amazon
and pushed their products, however there's also another type of
affiliate relationship which is between a merchant, and affiliate
management company and you the webmaster. The affiliate management
company in this case is the new partner and I can tell you that
Margie and I prefer this arrangement to dealing directly with an
individual online merchant.
Affiliate management company affiliation...
If you're familiar with mutual funds, then an
company is very similar to that. A mutual fund allows you to
diversify your stock while working with only one point of contact -
the mutual fund. Working with an affiliate company is the same since
you are working with the affiliate company and "they" have access to
sometimes hundreds of merchants and thousands of products and
services. In this case they locate advertisers/merchants and match
them up with you the affiliate marketer.
Unless there's a particular merchant which is not affiliated with an
affiliate management company, who has a specific product that you
must have on your site then we recommend you stick to marketing
products and services through an affiliate company. Yep, we do
market products and services through individual merchants, however
the percentage is 4% or less and in these cases we liked their
product and it wasn't available through an affiliate company.
The affiliate management company acts as "the middle man" who job it
is to attract merchants (advertisers) and attract web masters. The
affiliate company also provides all the software so you can access
stats, pull banners, check commissions etc. Besides the benefit of
advertiser diversification as mentioned earlier, you also have the
advantage of only needing to access one affiliate back office in
order to check your statistics and earnings for all of the
advertisers that you're working with. To take it up an additional
notch we also recommend you join a minimum of 5 affiliate management
companies. The reason for this is two-fold, first it provides you
with access to advertisers that might only be with one or two of the
affiliate companies, second not all payouts are the same with all
affiliate companies so being associated with more then one affiliate
company allows you to find some better affiliate deals when one
company offers a CPA of $1.35 and another offers $1.50 for the exact
Example: Advertiser X is working with Affiliate company A and
Affiliate company B. The advertiser has agreed to pay each affiliate
company $1.50 per lead that you generate, realize that they have
agreed to pay "the affiliate company" $1.50 for every lead you
provide but not necessarily pay you $1.50. The affiliate company as
the middle man then decides what "their cut" should be so you could
receive $1.25 per lead (affiliate company keeps 25 cents profit) or
$1.40 per lead (affiliate company keeps 10 cents profit), you just
never know. It's an ongoing balancing act for affiliate companies...
if they get greedy and take too much then affiliates won't promote
it, or the affiliates will find the same offer with a better payout
at their "other" affiliate company. Payout too much and sure, their
will be many affiliates willing to market the advertisers product
but then the affiliate company profit margin goes down.
OK, back to the two affiliate companies. Since each affiliate
company decides how much of the $1.50 advertiser cost to keep, it's
to your benefit to be with more then one affiliate company so that
you can see what the other affiliate companies are offering for a
particular advertisers product, otherwise it could cost you dearly.
True affiliate marketers story...
Margie and I were running a 125x125 banner for a
product where we were
commission of $1.20 per lead, at that time we were
averaging 8 or so leads a day from this banner. Nothing to announce
on twitter, but it was fine with us and we were earning $9.60 per
day or an average of $288 per month.... remember we're talking 1
product, via 1 banner here. After running this banner for over 3
months we received an email from the affiliate manager who told us
that "the advertiser" wanted to lower the payout on the product and
would we accept 80 cents per lead (a 33% drop!). We went to one of
our affiliate companies, found the same advertiser and the same
product and the payout was $1.60 per lead! So we put 2 and 2
together and knew that it was the affiliate company and not the
advertiser that wanted to bump down the payout (that ol' affiliate
company profit margin). We then switched out our link to the higher
rate affiliate company link and wrote back to the first affiliate
manager and told him no thank you on the new rate.
If we were only with one affiliate company then we would have been
railroaded and stuck with 80 cents per lead x 8 per day = $240 per
month. Instead, because we had signed up with more then one
affiliate company we had options available to us and the ability to
see (know) what was being offered elsewhere and in this case at
$1.60 per lead x 8 per day equaled $480 per month, big difference,
The recommendation then is that you join more then one affiliate
company so that you're in the position of choosing a wider variety
of products, services and offers for your visitors "and" you have
the flexibility to decide from which affiliate company you want to
use a specific offer.