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Affiliate Marketing Provides a Different Take on the Concept of Online Advertising

affiliate marketing provides a different take on the concept of online advertising. The rewards from affiliate marketing can be great, but the work can be hard! However, affiliate marketing isn’t, as the saying goes, rocket science. Become an affiliate of a given merchant, place that business’s advertisements on your site, and you’ll receive a commission for every paying customer you refer to the merchant’s site.

This chapter aims to help you cut some corners on the journey to affiliate marketing success. It’s excerpted from The Web Site Revenue Maximize, which contains ten chapters in total. You can, of course, download this chapter, along with two others, to read at your leisure.

We start by investigating exactly what’s involved in being an online affiliate, and how you can access a variety of affiliate programs. Next, we walk step by step through the process of monetizing your site with affiliate programs.  For more help visit to:www.money-secret-exposed.com. The advice we’ll uncover here applies just as well to an existing site as it would to a site you decided to build specifically for affiliate marketing purposes. For more detail go to:www.articles-page-machine.com.  The latter parts of the chapter give us the chance to investigate the details of some of the techniques you can use to optimize your site for affiliate sales, and to preempt the pitfalls into which the unwary affiliate marketer may plunge
Affiliate networks differ slightly from ad networks in that most give you, the publisher, and the choice of programs. You can choose which affiliate programs you want to join, and know up front what kind of commission you’ll generate per sale
Once you sign up for an affiliate service, and choose an affiliate program or two that interest you, you may have to wait to see whether you’ve been accepted. The merchants’ criteria vary, of course, but once you hear you’ve been accepted you’ll receive a special affiliate code, or affiliate link, that you can use in all the ads you place on your site for that advertiser’s affiliate products. Usually, merchants will provide a number of ads of various formats that you can drop straight into your site, but you’ll also often have the option to create ads of your own, in formats that suit your site, content, and audience.

Affiliate networks are obviously more flexible than straight-up ad networks, but remember, you must generate a sale to gain revenue. What does that mean in real terms? It means you’ll need to take a slightly different approach to using affiliate networks than you do CPC or CPM ad networks. If you want to make money from CPA advertising, your site will need to serve a strong niche and attract a targeted audience. We’ll look at the process of establishing your affiliate marketing site in a little more detail in the section titled Monetizing a Site with Affiliate Marketing.

Going straight to the advertiser provides a number of potential bonuses: you have direct access to the advertiser, so if you want to tweak ad formats or use different promotional text, for example, you may be able to ask them directly. You can also receive a greater percentage of each sale you generate, as there’s no middleman (or network) that needs to slice a percentage from each transaction.

Different Varieties Of Affiliate Marketing

The benefits of affiliate marketing is more pronounced today than before. This is one of the main reason for the immense popularity of affiliate marketing programs among so many thousands of internet marketers.

Latest web technology has enabled the affiliate marketers to get their statistics and income figures the moment they make an affiliate sale. It is now possible to use companies like PayPal for payment and receipt processing. This has highly curtailed the time that an affiliate marketer needs to wait for his payments to be collected from the merchants.

Both the affiliates and the merchants have now realised that affiliate marketing is effective for both of them. The merchants perceive affiliate marketing as an opportunity to advertise their products at a much lesser cost. On the other hand, the affiliates see affiliate marketing as a uncomplicated way of earning profits online by doing something which they like most, and that is web publishing.

Just as the popularity of affiliate marketing has gone into overdrive, similarly the outlook of people has changed for the better about affiliate marketing. Affiliate marketing is no longer considered as a secondary method of marketing by the merchants, or as an additional income source by an affiliate marketer. For merchants and affiliates alike, affiliate marketing is now considered as a main source of profits and revenues.

We now need to analyze what type of affiliate marketing will work best for any person? Are there any differences in affiliate marketing programs? Are the paybacks from these programs the same? Which are those affiliate marketing programs that work better than the others?

There are actually varieties of affiliate marketing, and the types will depend on how you are going to classify them. The primary classification of affiliate marketing programs falls under two categories: pay-per-click (PPC), and pay-per-performance (PPP).

1. Pay Per Click (PPC) – PPC is the most popular type of affiliate marketing for affiliates with small websites, and probably the easiest way for them to earn money. In this affiliate marketing type, the merchant pays his affiliate whenever a visitor is referred to his site, that is whenever someone clicks through the merchant’s banner or text ads. The affiliate gets paid a certain amount even if the visitor he referred does not purchase anything from the merchant’s site. However, typical fees for PPC affiliate programs are small, usually not exceeding a dollar for every click.

2. Pay Per Performance (PPP) – PPP affiliate marketing is well liked among merchants and is also the most rewarding type for the affiliates. In this type of affiliate program, the merchant pays the affiliate only when his referral converts into an action – that is whenever the visitor he has referred actually buys something from the merchant’s site or when the visitor becomes a lead. This means that the merchant saves a lot on his own direct marketing efforts. On the other hand, this type of affiliate marketing becomes financially most rewarding for the dedicated affiliate, for commissions in PPP affiliate marketing usually comes in the range of 15% to 20% of the actual product sales. And, in the case of e-products or e-goods, the affiliate commission can go as high as 70 – 75% of the sale price.

Pay-per-performance affiliate marketing can further be classified into two types: pay-per-sales (PPS) and pay-per-lead (PPL). Both these are highly popular.

a) Pay Per Sale (PPS) – In a pay-per-sale type of affiliate marketing, the merchants pay the affiliate a certain fee whenever the visitor he has referred to the merchant’s site actually buys something from the merchant’s site. Affiliates are often paid on commission basis, although other merchants would opt to pay a fixed fee. But no matter what the basis of the fee is, it is generally higher than the fee paid to affiliates in a pay-per-click affiliate program.

b) Pay Per Lead (PPL) – The pay-per-lead type of affiliate marketing is a slight variation of the PPS type and is often used by insurance and finance companies and other companies who rely on leads for their company to grow. In this type of affiliate marketing, the affiliate is paid whenever the visitor he referred to the merchant’s site fills up an application form or any similar form related to the business of the company. Compensation for this type of affiliate marketing is based on a fixed fee whose rates approximate that of the fixed fee in the PPS type. Generally, the sales conversion rate is the highest in the case of PPL, because, the visitor is not required to purchase anything but only complete a non-financial transaction, like, filling up an application form, subscribing to a newsletter, etc.

Aside from these three specific types of affiliate marketing, a lot of other affiliate marketing types exist. If the classification is based on the depth of the affiliate network, it can be classified as single-tier, two-tier, and multi-tier affiliate marketing. There is also another type of affiliate marketing that pays the affiliate each time the customer he has referred purchases something from the merchant’s site.

Single-Tier, Two-Tier, and Multi-Tier Affiliate Marketing

These types of affiliate marketing are based on the different levels or tiers in the affiliate network by which payments are made.

A) Single Tier – In a single-tier affiliate marketing program, the affiliates are only paid based on the direct sales or traffic he has referred to the merchant. All the previously mentioned affiliate marketing types (i.e. PPS, PPL, and PPC) fall under the single-tier classification.

B) Two Tier – In two-tier affiliate marketing programs, the affiliates are not only paid for the direct traffic or sales that he brings to the merchant’s site, but also on every traffic or sales referred by other affiliates who joined as sub-affiliate of the above affiliate marketer.

C) Multi Tier – Multi-tier affiliate marketing works the same way, although the affiliate gets additional commission for more number of levels of affiliates in different tiers in the affiliate network.

D) Residual Income Affiliate Marketing – In this type, apart from the affiliate getting paid for every customer he has referred to the merchant’s site, the affiliate is also paid whenever the customer he has referred goes back to the merchant’s site and purchases another product. Commission for such type of affiliate marketing is based on either percentage of sales or based on fixed fee.

Every affiliate marketer finds that these different affiliate marketing methods work differently for each of them. For instance, multi tier affiliate marketing, also called Multi-Level Marketing (MLM) is a highly difficult type of internet marketing and it does not work for everyone. As a matter of fact, many legitimate marketers consider MLM as illegal or something which is undesirable.

An affiliate marketer has to try out different methods and decide which will work best for him or her. He/she should then concentrate on those affiliate marketing methods which are suitable for his/her style of internet marketing business.