Levels in Affiliate Marketing
Affiliate marketing is a performance-based
marketing strategy wherein your affiliates (or your marketing men,
advertisers) will not get compensated unless they have realized a
desirable results- in other words, if they have generated sales. They
will never get paid for advertising your products, only when they were
able to generate sales, leads, downloads and subscriptions. Again, only
after they have raised revenues. Their compensation may come in forms
like payments, or commission by percent or by bounty.
It is in his own discretion to create a site and
collect marketing and advertising materials which may include banners,
an article or two or a web ad. In his own, he may devise marketing
strategies to attract customers to buy the products and services listed
in his site. Once a buyer decides to buy from his products, the
merchants or the manufacturer then gives him commission based on the
quantity and size of the product/s bought. Only then will the affiliate
Compensation scheme in affiliate marketing varies,
from one strategy to another. For example, amazon.com may offer 15%
commission for every book sold, depending on the terms and conditions,
which applies. Other merchant like the LendingTree is giving a $14
bounty for every approved or qualified application. Moreover, financial
companies like the NextCard offer $20 for every enrolled cardholders.
Affiliate marketing works in three levels: the
merchant, the search engines and the affiliate.
For the merchant, the benefits of affiliate
marketing is1) they have no investments whatsoever for affiliates, 2)
affiliates do the advertising for them and their products, 3) they are
guaranteed of a continuous stream of sales revenues through links,
downloads, subscriptions, registration and actual sales. Through these,
marketers or merchants have shifted the advertising costs and risks to
the affiliates. However, they still have to deal with the risks coming
from their advertising partners. In a sense, merchants are online
businesses, which sells services and goods.
Nowadays, nearly all the merchants employ the use
of affiliate marketing strategies, and in some cases even affiliate
networks. Running an affiliate network may not be that complex,
nonetheless it may require some time to develop as it might drive the
merchant to create the technology to tract the revenues of the
affiliates involved in the network for transparency.
Due to the fact that marketers are now more
focused on the performance-based marketing strategies, online selling
such as affiliate marketing is becoming to be viewed as the future of
capitalization and the likes.
The network affiliates are the intermediaries
between the merchants and the affiliates. In away, they act as the
middlemen wherein all transactions and sales revenues are monitored.
There are many intermediaries out there to choose from but the
merchants already provide intermediaries.
On the other hand, the affiliates act as the
salesmen and in some ways the product advertisers. They do the
marketing, selling and the advertising of the products they endorse. In
essence, the merchants rely on the affiliates and in return, the
affiliates represent the marketers. The affiliates then earn through
their generated sales. However, the merchants have zero investment on
them, meaning they are not liable for any support of any forms.
Affiliates will then get paid if buyers purchase from them in forms of
commission and bounty, depending on the agreement made between them and
the merchants. Commissions will be generated through referrals of
leads, sales and subscriptions.