Get an overview of how affiliate programs work, how to join them and learn what you can earn from them in your online buness.

 
       
       
 

Learn all about affiliate marketing and how you can earn from them with your website.

     Affiliate knowledge is the foundation of your long term affiliate marketing success.  

 

 

 

 

 


An Overview of Affiliate Marketing

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 Webmaster that 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 affiliate management 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 same offer!

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 earning a 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, you betcha.

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.

Credit: This article written by Whitney Jacqueline, V.P. of Jasco Network. For questions please contact her at: Whitney Jaqueline, main team core website: Lotto Magic Network

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Learn about affiliate marketing through the Affiliate Marketers Beginners Guide.   Affiliate Marketers Beginners Guide