Affiliate Marketing is the process of promoting someone else’s product or service in return for a commission or payout.
It’s a type of performance-based marketing that allows companies and merchants to reach wider audiences, thereby increasing sales and customer base. There are a number of different forms of affiliate marketing but the results are always the same. Affiliate marketing practices are often referred to as affiliate programs or affiliate offers. However, there are several different affiliate marketing pricing models and formats.
The affiliate marketing industry can be split into four key players:
Typically speaking, the advertisers or merchant will only pay when a chosen action is executed, hence the popularity of affiliate marketing by direct response advertisers. This could be a sign up, a purchase or something as simple as a view or click. A successful completion of an affiliate offer is often referred to as a conversion or lead.
A pixel is inserted into the offer page and is fired as soon as a specified action is fulfilled, thus resulting in a successful conversion. The front end of the offer is what a person would see if they visited it online, for example the website or landing page. Merchants’ payouts will differ. Some choose to pay per conversion whereas others will pay a commission or referral fee. It all depends on the merchants pricing model.
Typically a merchant or offer owner will partner with an affiliate network to find affiliates to promote their program. However, sometimes they will exclude the middle man and connect directly with the publisher. The benefit of using an affiliate network is that they normally have a vast database of proven affiliates and will also handle payments and processing. In return, the network will take a percentage of the offer payout or commission.
Affiliate marketing is all about numbers and you are deemed successful on your profitability.
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