Affiliate marketing is one of the oldest and most used forms of marketing. Under this marketing programme, you refer someone to any online product and when that person buys the product based on your recommendation, you receive a commission. It is performance-based, which means the affiliate only get paid when their promotional efforts actually result in a transaction. The commission varies and depends on what product you are promoting.
Who are Affiliates?
Affiliates are generally bloggers or other content sites related to merchant’s industry. They introduce their site visitors to the merchant’s brand so that they perform a transaction on the merchant’s site.
What is 2-Tier Affiliate Marketing?
This is another stream of making money from an affiliate program. With this method, with this method, you recommend that others join affiliate programs, and you receive a commission when a sub-affiliate makes a sale (similar to MLM or multi-level marketing). This income is also known as a sub-affiliate commission.
How they do it?
Affiliates generally carry feature banner ads on their site with the objective to drive people to the merchant’s site or offer visitors a special coupon code to redeem it on merchant’s portal. If people come from that affiliate’s site and perform transactions, that affiliate gets paid.
Historically many affiliate programs were comprised of coupon and loyalty sites. As the industry matured, many innovative programs are stretching the definition of affiliate marketing that includes partnering with schools, individual professionals etc.
The Mechanism
A tracking URL (uniform resource locator) is used to track the record of who is sending the traffic and making the sales. This link is provided by Affiliate Company or Product Company. This URL keep tracks of all the traffic and sales affiliates are making via their websites or other promotional techniques.
Every affiliate program has a set TOS (Terms of Service). For instance, many of them offer a 60 day cookie period, which means that if a visitor uses your special affiliate link to land on the sales page of the site and buys something within the next 60 days, the affiliate will be entitled to the sale’s commission.
The Revenue Stream
Since it’s a performance-based program, it provides higher ROI than other channels. Merchants only pay for actual transactions and not just for visits or views. When there are multiple affiliates involved in one transaction, payment gets much more complicated. Successful affiliate programs use multi-channel attribution to ensure the affiliates that create the most value get paid the most.
Many established organizations have dedicated affiliate managers to help publishers earn more by giving them optimization tips.
Networks
Affiliate programs are organized and managed through a variety of affiliate networks. Some programs choose to work on multiple networks while others are consolidated on just one. Most major affiliates work with multiple networks.
The network uses cookies to track a customer’s journey from the affiliate’s website (or multiple affiliates’ websites) through the merchant’s shopping cart. The network then automatically pays out commissions to affiliates based on the rules set by the merchant.
Management
Some merchants run and manage their affiliate programs in-house, other outsource the task to affiliate network management companies or an external agency. Whoever is managing the program does the work of recruiting quality affiliates, getting them engaged, finding ways for them to promote the merchant, and valuing the ones that bring in incremental revenue.
Indian Scenario
At present, affiliates contribute to more than 15% of the total sales across online retail sites in India. This is an incredibly significant number considering that retail e-commerce sales are likely to grow by leaps and bounds in coming years. The giant online retail stores like Flipkart, Snapdeal, Amazon etc have their own affiliate program. Even start-ups like Bewakoof, Zepo etc have invested in their personal affiliate programs by using third-party affiliates tracking software.
The online coupon industry is another major part of affiliate network today. In India, experts predict that this particular industry is pegged to evolve by upto 20% from its existing position in coming years.
Conclusion
With an effective affiliate marketing program, one can discover an item you like, advertise it to others and procure a bit of the profit for every deal that you bring in. It’s a win-win situation for every concerned party since affiliates enjoy a commission and merchant is also happy in the light of the fact that they have another deal from the client they won’t be able to reach via normal procedures of marketing.
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