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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, (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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