Affiliate Marketing Basics

In simple words affiliate marketing is an internet marketing practice in which an affiliate is rewarded with a preset commission by advertiser whenever a user is referred from affiliate website to merchant website and user purchases something or completes any action. Here action could be a registration or newsletter signup. So, affiliate is only paid when any sale happens or an action is completed; which is why affiliate marketing is also termed as performance market.

Parties involved and their roles
The whole affiliate marketing concept revolves around three key players as listed below.

1. Merchant/Advertiser: the party that want to promote or market their product.
2. Affiliate is the party that actually do the marketing for a merchant through their website, various online marketing activities. Based on the marketing activity followed by affiliates they can be categorized as:

* Email marketing affiliate: these affiliates promote merchant’s product through email marketing. These affiliates have their own database to which they send very targeted and converting e-mailers.

* PPC Affiliates: these affiliates promote merchant’s product through search engine marketing i.e. paid ads on Google, Yahoo, MSN and other popular search engines. These affiliates send very highly targeted traffic. PPC affiliates either create a single page for lead capturing or they create comparison website providing comparison among various products and hence giving consumers the flexibility to choose between the best, suiting to their requirement.

* Display Affiliates: affiliates having big websites with huge traffic come under this category.

* Loyalty/Cash Back Affiliates: these are special type of affiliates that pay consumers with the benefit of cash in return if they purchase or refer some to purchse via their website. They provide the complete reporting to their consumers wherein they can check the commission earned.
* SEO affiliates: these affiliates promote through SEO on various search engine such as Google, Yahoo, and MSN.
* Social media marketing affiliates: these affiliate promote merchants product using many social activities such as blogs, social communities , online forums and email groups.


3. Affiliate Network is the third party player that sits in between merchant and an affiliate. Both merchant and affiliate signup with an affiliate. Both the parties have to rely on affiliate network for reporting purpose. Both are provided with a panel wherein they can check reports and do other activities such as approving affiliate, applying to a program, take banner codes etc. The role of an affiliate network includes:

• Providing technology to track end to end user activity
• Reporting
• Affiliate recruitment and management
• Affiliate support
• Banner serving space to advertiser