As you have browsed the Internet, you may have come across affiliate programs and wondered what are these and how do they work. Affiliate Marketing offers many website owners the tools to monetize their traffic, to make money out of their hobby.
If you have a webpage or looking to create a website, you should know that you can also make some money out of it by promoting some complementary products or services to your readers. Affiliate marketing is basically a marketing concept that pays website owners some commissions for sales referred from their website to the merchant. Call it a performance based marketing channel – you will get payed only for sales generated from your website.
Affiliate marketing is not a very difficult concept, and the Internet has an abundance of affiliate programs for every industry. So regardless of the type of website you run, you will surely find some interesting products or services that you can link to, set some banners on your website that your readers may find interesting, click on them and end up buying something and generating an affiliate commission for your.
While this is the main concept in affiliate marketing – payment models and affiliate functionalities may differ from a program to another, and moreover from an industry to another. We have created some affiliate starting guides that you can check for more details on each specific industry:
Why is there Affiliate Marketing?
As the Internet grows bigger by day, getting your product or service to the right audience as a merchant gets more difficult. A lot of competition, difficulty to appear in best positions in search engines, high costs of advertising channels – all these push merchants to look for new marketing channels.
As there are quite a few websites out there that are run mainly as hobbies and already have a loyal readership audience, tapping into that pool readers and potential customers requires and advertising deal. Affiliate marketing is the most common deal present as it allows the merchant to keep ad costs under control by agreeing to pay a certain commission level from generated sales.
There is no more guess work with affiliate marketing like it happens in regular advertising deals – the payment is a percentage or a fixed pay / lead or sale generated, no more or less.
How does Affiliate Marketing Work?
In the process of affiliate marketing comes up the affiliate program. The affiliate program is a section set by the merchant that sets the legal framework of the marketing channel, and also offers access to marketing tools (links, banners, widgets etc) and affiliate reports.
As a website owner, you can register to an affiliate marketing program, and access the program firstly to get the necessary marketing tools like affiliate links or banners. You can then use these to integrate on your website. When your readers click on these links or banners and buy something from the merchant site, you will get credited a commission as set in the affiliate program rules.
What happens if the user doesn’t make an immediate purchase? Well most affiliate programs offer a tracking of between several days to several months. That means that if a user you referred to a merchant goes back to the website a few days later and ends up buying something there, you will still get credited for this sale.
Affiliate Marketing as a Business
While there are many website owners that run their projects mainly as hobbies, there are also many online businesses that run on affiliate marketing. These businesses may own one or multiple bigger web projects, with employees to manage, and their sole source of revenues to be affiliate marketing.
Such businesses are in every industry vertical, and to get an idea of such projects, think of Trivago.com for example, that compares hotel rates for users – their sole revenue comes from affiliate commissions from the hotels they promote.