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What is Affiliate Marketing?

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Individuals wishing to make the most of their online presence should consider taking advantage of the income producing opportunity provided through affiliate marketing. Affiliate marketing can be a great way for website owners to generate passive income from existing traffic sources. Affiliate marketing may not be an option for everyone, but for some, it can be an extremely lucrative opportunity.

Affiliate marketing is a method of revenue sharing that involves placing an advertiser’s banners or text links on another website owned by another individual or group. The affiliate or website owner receives a referral fee or commission when a customer performs an action such as:

- Visiting the site

- Making a purchase

- Opting-in an email newsletter

The primary purposes that advertisers participate in affiliate programs are to obtain leads and make sales.

Types of Affiliate Programs

There are different types of affiliate programs. A few of the most common types of programs are:

Pay-Per-Click-This method allows affiliates to generate income from the amount of traffic referred to a specific site. This method usually pays small amounts but is the easiest to implement.

Pay-Per-Lead-Advertisers who participate in this type of program pay affiliates when a visitor subscribes to an email newsletter or downloads a program. In most cases advertisers pay for the leads, but there are some pay-per-lead programs that require purchases to be made by subscribers before payment is tendered.

Pay-Per-Sale- This type of affiliate program is also known as a revenue sharing program. Higher commissions are offered to affiliates, resulting in higher earning potential. However, consumers must purchase a product before payment is made.

How Affiliate Marketing Works

Joining an affiliate program isn’t rocket science. Once an affiliate joins, certain codes are provided to the affiliate to be placed on the website. Sometimes affiliates are able to choose the types of banners or products that are served by the ad, but in many cases the affiliate has no control over what type of advertising is offered.

Most affiliate programs require participants to sign an affiliate agreement, agreeing to their terms of service. These agreements detail the program requirements and how lead generation or sales are tracked and payment is dispensed.

Affiliate programs generally work by using a unique user ID and cookies to track leads and revenues provided by affiliates. By utilizing browser based cookies the site can track the leads generated by affiliates, and the actions taken by each lead.

Choosing the Right Affiliate Program

There are numerous affiliate programs to choose from, and each of these programs is structured differently. Here are a few helpful hints to keep in mind to assist in finding the right affiliate program:

Choose Products and Services You Want to Promote Certain types of affiliate programs may not allow users to choose the types of products and services advertised. However, choosing a product that is appealing and useful for visitors will enable website owners to potentially earn more revenues. Having a choice in what types of products are advertised is especially important for sites that are based on content and reputation.

Choose Relevant Products and Services Affiliate advertisements should never stick out like a sore thumb. Ads should appear relevant and offer compatible products and services. If they don’t, the affiliate program probably isn’t the right type for the site. Affiliate programs should always be related to the topic or theme of the affiliate site.

Do You Understand the Affiliate Agreement? Affiliates should take time to make sure they fully understand the affiliate agreement. Also, check out the advertisers prior to joining. There are numerous cases where unsuspecting affiliates generate leads and traffic for sites that refuse to pay for those services.

Do They Offer Real Time Tracking and Reporting Options? The best affiliate programs provide affiliates with real-time automated statistics in order to view conversions sales and statistics. It’s also helpful to have an in-home method for cross checking the accuracy of the tools provided by the affiliate program. Even reputable programs can have serious errors resulting in a loss of revenue for affiliates.

Maximize Earning Potential

The biggest issue that affiliates face is finding a good program that can produce results. There a few things affiliates can do to maximize their earnings:

- Another good reason for reading the fine print is to determine payout information. It’s extremely important to understand how payouts are structured in order to determine if a particular program will earn the most revenue.

- Check out Google and Alexa rankings for advertisers. Well-known names could translate to better conversion rates for affiliates.

- Take advantage of style options offered in affiliate programs in order to better incorporate advertising into your site’s structure. Advertising that looks out of place won’t result in better conversion rates.

- Try out several affiliate programs in order to determine the one that fits best. Be patient when looking for results and never forget that generating traffic for your own site will result in better conversion rates for your ads.

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