Online Channeling Principles of Affiliate
Marketing
Affiliate marketing is an online marketing
strategy, which employs the use of web businesses wherein affiliates
are compensated with every successful transactions they were able to
produce. It is a modified method of advertising and selling a
merchant's products through introducing new consumers with marketers.
Affiliate marketing has three elements: pay-per-click, pay-per-lead and
pay-per sale. The specific value of each visit to the web site, the
registrant and the actual commission of the customer or the sale
respectively.
Also, affiliate marketing is the direct channel
for marketers and retailers and advertisers alike, as it provides a
medium for online sales and marketing. It opens new opportunities for
other online marketing channels as well. Moreover, it is one of the
more cost-effective way of advertising online, not to mention in its
return of revenues for investments. Most importantly, it allows the
fixation for rates of returns, which may be used as the basis of
pricing for other marketing channels.
Nowadays, many businesses are applying this
strategy of multi-channel marketing. In fact, the majority of these
businesses owe a great deal of their success from the services of this
marketing technique. Aside from the main feature that is- no
outstanding payment is due until the affiliate gains revenue that
affiliate marketing may provide, it may also render services essential
to achieving a marketer's goals.
In the early years of affiliate marketing, many
investors and merchants deem it as breakthrough in online businesses
and advertising. Nevertheless, along it's progress the
uncontrollability and unmanageability of this multi-channel marketing
allowed the spammers to take advantage of the weakness of the system.
However, this thing of the past was solved by refining the terms and
conditions to obstruct the spamming of the search engines by the
affiliates.
There are a number of types of affiliate
strategies, which may be added to a merchant's sales channel. These may
include web hosting, third party affiliate networks, standalone
softwares, and shopping carts with features on affiliates.
Some time in 1996, Amazon.com (an e-commerce site
that pioneered on affiliate marketing) started running their affiliate
programs. However, many e-commerce vendors made use of the third party
services rendered by agents like ClickBank, Commision Junction and
LinkShare. Presently, many industries have adopted the system, often
structuring their affiliate programs with those of the pioneers in
affiliate marketing.
An affiliate may provide services to consumers
through:
· Providing the consumers with a
one-stop shop where they may find great services and products.
· Creating a channel for bargain
shoppers through centralizing online specials and coupons.
· Providing possibilities of supporting
charities and colleges.
· Making the process of hunting for
services and products, e.g. credit cards, computer softwares and
hardwares, wireless services.
On the other hand, affiliates may provide
marketers with:
· A continuous stream of transactions.
· A progressive sales.
· Referrals with consumers and
customers and other affiliates.
· Pre-determined Return of Income
revenues.
The following are listed to provide parallel
examples with how affiliate marketing works:
· Companies that provide financial
services compensate their agents through payments with every approvals
or applications for credit cards, applications for mortgages, opening
of bank accounts and brokerages.
· New subscribers were being paid with
every subscription to Internet Service Providers and Telecommunications
Companies.
· Travel companies pays for every
booked hotel rooms and airline ticket bought.
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