How To Earn From Affiliate Marketing
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Transcript of How To Earn From Affiliate Marketing
9.1 Introduction
Affiliate program A form of partnership in which a company pays
affiliates (other companies or individuals) for prespecified actions taken by visitors who click-through from an affiliate site to a merchant site
In this chapter, we discuss: Costs
Benefits
Program reward structures
Program-building options Tracking and affiliate solution providers
Directories and search engines that provide affiliate- and partnering-program resources
9.2 How an Affiliate Program Works
New income streams Merchant
The company that advertises on another company’s site
Affiliate The company hosting the advertising in return for a
reward based on predetermined terms Affiliates act as an extended sales force
How it works Merchant places banner on affiliate’s Web site When a person clicks through to the merchant’s site
via the advertisement on the affiliate’s site and makes a purchase, a commission on the sale is typically awarded to the affiliate
“Win-win" situation
9.3 Selecting an Affiliate-Program Reward Structure Program reward structures
Pay-per-click
Pay-per-lead
Pay-per-sale
CPM (cost-per-thousand)
Multi-level, or multi-tiered
Hybrid model
Implementation of appropriate reward structure(s) depends on the type of site and its product mix
9.3.1 Pay-Per-Click Model
Pay-per-click model Rewards an affiliate for each click-through that is
generated from a banner ad hosted by the affiliate
A click-through is when a person clicks on the banner advertisement on the affiliate site and is taken to the merchant site
Easy for affiliates to generate dishonest click-throughs to “run up the numbers”
Sites that depend on advertising rates use this model to increase traffic
GoTo and Lycos
9.3.2 Pay-Per-Lead Model
Pay-per-lead model Rewards affiliates based on the number of
qualified leads generated
Potential customers that have expressed interest in a product or service and meet requirements determined by the company
Can include new customer registrations and having visitors sign up to receive a newsletter or use a free demo
Mailsweeps.com
9.3.3 Pay-Per-Sale Model
Pay-per-sale model Also known as the commission-based model
Compensates its affiliates for each sale resulting from affiliate-hosted advertisements
Rewards to the affiliates based on sales are typically larger
express.com
Virtual store
Allows affiliates to sell merchant’s products without requiring visitor to leave the affiliate’s site
9.3.4 Multi-Tiered Model
Multi-tiered model Also known as the multi-level model
New affiliates are recruited by current affiliates, who are then rewarded with a percentage of the new affiliates’ revenues
Two-tiered model involves only the original affiliate and its recruits, also known as subaffiliates
ValueClick
9.3.5 Hybrid Model
Hybrid model Combines features of multiple models
Can make an affiliate program more competitive
Can increase the cost for the merchant
FreeShop.com
9.3.6 CPM (Cost-Per-Thousand) Model
CPM (cost-per-thousand) model Requires the merchant to pay the affiliate a fee
for every 1000 visitors that simply view the merchant’s banner on the affiliate site
Not used as often as the other models because merchants prefer to pay for actions
CPM is often used to price traditional advertising methods
9.4 Attracting Affiliates
Grow affiliate program and increase profits Try posting announcements on message boards Newsgroups
Online discussion groups Spamming and unwanted advertising are
unwelcome and can against rules Deja.com
Directory A site that provides aggregated information and
links to sites relevant to specific topics Determine reward structures and commission
amounts of competitors
9.5 Monitoring An Affiliate Program
Use tracking information To analyze effectiveness of programs, make
improvements, monitor payment schedules and identify strongest affiliates
Creating tracking solutions By creating duplicates of every Web page, each
affiliate can link to an individually assigned page Referred visitors will click through to only the mirror
page (the duplicate page) designated for that specific affiliate, allowing companies to record these visits separately
Costs include time, hosting and updating mirror pages, payments, marketing, credit-card processing and customer service
Affiliate program software AffiliateZone.com, My Affiliate Program and
Pro-TRACK
9.6 Affiliate Solution Providers
Affiliate solution providers Companies that can provide end-to-end solutions
for a company’s affiliate program
Recruit affiliates and merchants to participate in programs, conduct accurate tracking, provide detailed reporting for merchants and affiliates and distribute commissions
Fees may be required for affiliate solution services
9.6.1 Commission Junction
Commission Junction offers design, implementation and management services (B2B affiliations) No fee to become affiliate, merchants
charged a fee Application service is Web based
Do not have to download or upgrade any software
Instant tracking and reporting in real time Makes monthly payments to affiliates for
merchants EnContext solution Services to merchants include SmartMatch
SmartTrack SmartZones SmartStats SmartServe SmartPay
9.6.2 LinkShare
LinkShare offers affiliate programs for B2B and B2C Affiliates can join pay-per-click, pay-per-lead and
pay-per-sale programs for free Merchants can use The LinkShare Network , a
Private Label Network or a combination of the two to develop affiliate programs LinkShare Network provides merchants
with access to companies that have become affiliates through LinkShare
LinkShare Synergy
Private Label Network allows merchants to sign up affiliates through their own Web sites
9.6.2 LinkShare
LinkShare’s home page. (Courtesy of LinkShare Corporation.)
9.6.3 Be Free
Be Free, Inc. BFAST (affiliate-program enabler) Allows companies to target affiliates in a
segmented manner Rewards and compensation determined by the
merchant Be Free tracks impressions, click-throughs and
sales for both the merchant and its affiliate partners
Be Free records each time a promotion is viewed or acted upon
When a sale is made, Be Free receives information through its connection with the merchant’s site
Reporting.net is used to provide performance information
9.6.3 Be Free
Be Free’s performance-marketing for page merchant. (Courtesy of Be Free, Inc.)
9.6.3 Be Free
Be Free demonstration: How promotions work, step 1. (Courtesy of Be Free, Inc.)
9.6.4 ClickTrade
ClickTrade is part of Microsoft bCentral Web-based service provides tracking and
payment services Pay-per-lead, pay-per-sale or hybrid-model
program Merchants have control over affiliate links and
banners Charges 30 percent of any merchant payments
to affiliates Companies can sign up to be affiliates for free Provides reports including tracking of affiliates
9.6.5 PlugInGo.com
PlugInGo.com Affiliate Network Web-based solution for affiliate programs
Affiliate Mail Center
Online message boards
Rewards members through PlugInGo Points that Pay
Reports can be produced daily, weekly or monthly
Performs payment-processing services
Companies can join as affiliates for free
Charges one-time setup fee and a commission of two percent of every sale or lead made through the network
9.7 Web-site “Stickiness”
Stickiness of a site The ability to keep people at a site and interested
in its content
Update content frequently, carefully organize a site, provide quality customer service to keep visitors browsing
Merchants can offer virtual stores to affiliates Offer e-commerce capabilities to sites that want
to participate in affiliate programs, but also want to keep visitors at their sites
Nexchange and CrossCommerce
Can control their brands’ presentation on affiliate sites
9.7 Vstore.com Feature
Vcommerce Corporation provides sites with store-hosting opportunities through vstore.com Manages credit-card transactions, order
fulfillment, customer service and hosting of the storefront
Provides step-by-step process for design and implementation
Select a category from the listed choices Select a subcategory to further concentrate on a particular
market Choose a store design, store colors and store typography Personalize store with a name, slogan and logo. Provide personal information such as e-mail address, name,
phone number and commission payment information
9.7 Vstore.com Feature
Sample store from vstore.com. (Courtesy of Vcommerce Corporation.)
9.8 Becoming an Affiliate
Low barriers to entry
Usually free
Joining too many programs may make the site look cluttered and unprofessional
Identify a target market
Sign up directly at the merchant’s site or join through an affiliate solution provider or affiliate directory
Adbility Offers information on various forms of marketing,
including affiliate programs
9.8 Becoming an Affiliate
Adbility’s specific segments within an industry. (Courtesy of Adbility.com.)
9.8 Becoming an Affiliate
Adbility’s listing of affiliate programs for books in the “general” segment. (Courtesy of Adbility.com.)
9.8 Becoming an Affiliate
Some programs have requirements to become an affiliate Site statistics, information about visitors and a
tax identification number
Hidden fees and restrictions in some affiliate contracts
Note the reputation of the merchant
Most affiliate programs require a person or company to have a Web site to participate
Some programs allow individuals to join by placing affiliate links on their personal sites
9.9 Examples of Affiliate Programs
Amazon.com Associate Program Pioneer in affiliate marketing
Sites will be rejected if they contain “amazon” or variations of the word in the domain names, promote violence, are discriminatory or contain sexual material or other content deemed inappropriate
Associates Central
provides graphics, links, earnings and traffic information
Affiliates can provide an Amazon.com search box on its site or link to the home page or recommended books
Joining is free and pays up to 15 percent in referral fees
9.9 Examples of Affiliate Programs
BabyCenter offers a commission-based affiliate program
Pays members for all sales originating from their sites
Pays affiliates for their own personal shopping through the links on their sites
Affiliates are paid on a quarterly basis
BabyCenter Affiliate Gateway provides earning reports, images and links that can be downloaded to connect to the merchant site
9.9 Barnes & Noble Feature
Barnes & Noble offers Affiliate Network Potential affiliates must complete online
application Gives options for links, banners and virtual
storefronts affiliate.net provides affiliate performance reports Sends a commission check to affiliates every
three months
MyB&NLink program allows people to earn commissions by placing a link to the Web site in their e-mails Restrictions include spamming, pornography,
hate mail and illegal activities
9.11 Costs and Taxation of Affiliate Programs
Costs Merchant is required to pay the affiliate, with the
amount depending on the prespecified terms of the program
Costs can rise with increases in the number of click-throughs, purchases or other specified actions
Losing visitors through affiliate links Developing and implementing the program
Internet affiliate program taxation Commissions collected by affiliates are considered
income and will be taxed State taxation on sales made through affiliates in
states other than the state where the merchant is located has not been settled
9.12 Affiliate-Program Directories and Search Engines Affiliate-program directories and search engines
Provide parties who are interested in becoming affiliates with programs that match their interests, and parties who are interested in finding affiliates with the different options available to them
Associate-It, AssociatePrograms.com, Refer-it and AffiliateFind.com
9.12 Affiliate-Program Directories and Search Engines
Associate-It’s home page (Courtesy of iSeed Inc.)