What affiliate marketing is14.9.2016Reading Time: 2 minutes
Affiliate Marketing is a type of performance-based marketing the key process of which is promoting a product in return for a payout. Affiliate marketing has a lot in common with other Internet marketing methods because affiliates often use regular advertising methods. For example, search engine optimization (SEO), e-mail marketing, content marketing, working with social media and so on.
There are three key roles in Affiliate marketing: advertisers, affiliate networks and publishers/affiliates.
The advertiser is the one who has an offer and who want to sell it with a help of an affiliate network and of a publisher/affiliate. Merchant collaborates with an affiliate network and provides it with offers. He pays for results driven back to his business.
The affiliate network is kind of an intermediary between advertisers and affiliates. The affiliate network provides publishers with offers from advertisers and controls the business process in general, including conversion tracking, supporting publishers and, of course, handling the payments.
The publisher (affiliate) chooses the offer from the network’s lists and then makes money by generating sales, leads, and traffic for this offer. The publisher is the one who attracts the user to an offer and aims to make him do the action which is needed for an advertiser.
Each of these participants has his own abilities and the same main aim – to get an income. The more effective their collaboration is the higher results they get. Making strong profitable relationships between an advertiser and a publisher is also one of the affiliate network’s responsibilities, that is why collaborating with an affiliate network makes the work process simple for both advertisers and publishers.
Of course, the whole business process in Affiliate marketing is not possible without another important participant – the consumer.The customer is a regular Internet surfer just like one of us. He is the one who takes action on the offer as a final result of publisher’s, network’s and advertiser’s work for which they all being paid.
To sum up, business in Affiliate marketing looks this way: an advertiser has a product and wants to sell it with a help of an affiliate network. The affiliate network makes an offer, and thenthe publisher generates sales, leads, and traffic for the advertiser’s offer. As a result, an advertiser sells his product, a network coordinate publishers and makes payments, publishers attract users and get paid.
There are various types of the affiliate programs and pricing models, but the most effective one is a CPA model. CPA is cost-per-action (sale) and means that an affiliate gets paid only for a concrete action the user he attracted made. This action depends on the advertiser’s need: it may be a click, a sign-up, a download, a purchase and so on. To track the effectiveness of publisher’s work, there is a pixel inserted into the offer page and it fires right after the needed action is made. This is called a conversion or lead for which advertiser is paying.
We described the process of working in Affiliate marketing including an Affiliate network’s participation. In fact, not all advertisers and publishers prefer collaborating with a network, some of them prefer work directly with each other. However, for advertisers working with an affiliate network allows to use a network’s database of proven affiliates and forget about handling payments. Publishers, in turn, have a real support with some useful tips and may stop worrying about the honesty of an advertiser neither.