Introduction to affiliate marketing

What is affiliate marketing?

Affiliate marketing is the practice of advertisers (retailers or merchants) rewarding publishers (affiliates) for introducing visitors or customers to their business.

In many cases affiliate marketing occurs online, with bloggers, forum owners, deal-sites, coupon-sites, reward-sites and cash-back sites actively trying to drive potential customers in your direction.

How does it work?

There are three major types of affiliate program:

• Cost per acquisition (CPA) or cost per sale (CPS): This type of program pays a percentage or fixed amount of commission for each sale made from an affiliate referral.
• Cost per lead (CPL): These programs pay a fixed amount of commission for each lead (such as a newsletter subscription or product query) that an affiliate introduces to a business.
• Cost per click (CPC): A fixed amount of commission is paid for each click an affiliate site sends to the business.

Is affiliate marketing right for my business?

Affiliate marketing can be a very successful way to gain leads and sales and grow your business. It’s employed very effectively by the likes of Amazon, Dell and Apple, all of whom have very active and successful programs in place.

While that may make you think of affiliate marketing as a tool that’s used exclusively by the big end of town, that really isn’t the case. You can make your affiliate program as large or as small as you like.

Even if you’re in a niche market, there’ll be a way to make affiliate marketing work for you.

Want more articles like this? Check out the business marketing section.

You’re in control

The massive advantage of affiliate marketing is that you determine what each sale, lead or click is worth to you, and you set the price or commission level.

You can also control many aspects of the promotion of your site, for example by making banner designs available for your affiliates to use.

How do I get started?

You need to consider a few things before starting your own affiliate program:

• What type of program should I start? CPA, CPL or CPC?
• What commission level and type should I offer, percentage or fixed?
• Should I host my program on an affiliate network or host my own?

Once you can answer these questions you’re all set to start your own affiliate program. If you’re sure of the approach you want to take ask the affiliate network or an affiliate marketing specialist to set things up for you.

With a little bit of technical input you can have a program up and running within 24 hours.

Provided you maintain a proactive relationship with your affiliates, the investment you make in your program can be returned in spades.

Do you use affiliate marketing in your business, or are you an affiliate yourself? Please share your experiences with us.