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The following article was published in our article directory on June 17, 2019.
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Affiliate Marketing Basics

Article Category: Internet

Author Name: Gary Higgins

Affiliate marketing is a system that rewards affiliates for bringing in visitors and/or clients. It has four components:
The retailer, brand, or merchant
The network that presents offers that an affiliate can choose from and handles the payments/rewards given
The affiliate or publisher
The customer
It is related to internet marketing because affiliates use advertising methods such as SEO (Search Engine Optimization), Pay per Click (PPC) marketing, content marketing, e-mail marketing, and display marketing. Affiliates may also go by traditional techniques like publishing feedback of the retailer�s services or products.
It is sometimes mistaken as referral marketing. Although similar, they differ because affiliate marketing works through payments while referral marketing is based on relationships and trust.
Compensation Types
most affiliate programs (an estimated 80%) use PPS (Pay per Sale) marketing. PPS is sometimes called CPS or Cost per Sale Marketing. It is a compensation system that pays a blog owner or post publisher an amount or an incentive that is based on sales generated by the ad. It is considered as a form of revenue sharing where the income is distributed among contributors and stakeholders.
19% of programs use CPA (Cost per Action) compensation where the merchant pays an affiliate whenever an action was done. For example, whenever a link is clicked, a form is submitted, a sale is made, a newsletter is signed up for, etc. Direct response advertisers are reported to prefer this method because they only pay whenever a desired activity has happened.
The rest use other strategies such as CPM (Cost per Mile or 1,000 views) and CPC (Cost per Click). These are not popular among mature businesses, but are preferred by those that depend a lot on paid search and display advertising.
CPM involves displaying the ad on a website to accumulate views � payment is made when it is watched a thousand times. CPC requires that the website visitor must not only view the ad but click it as well so he/she reaches the brand�s own website. This has decreased in usage because search engine management prohibits the usage of fake clicks that are generated by computer programs.
Some affiliates are compensated with a Cost per Day scheme where they receive a flat amount for advertising their partner�s business. This is most prevalent in non-western countries such as China.
Businesses may offer multi-level programs that distribute commission in a referral network of sub-partners. When an ad publisher signs up and attracts others to the program using his/her code, he will receive a small percentage of the commissions generated by the others he brought in. Most programs only involve a single tier of referrals, but some can extend beyond two levels. As such, it can be considered as a form of multi-level marketing.
Affiliate Website Types
Commission can be available from the following websites:
Personal websites and blogs
Websites using PPC search engines
Websites containing ad bars that show products reflecting the context of the site
Online stores
Price comparison sites
Websites that offer loyalty incentives
Rebate and coupon sites
E-mail marketing affiliate lists
File and video sharing sites
Virtual currency providers (to be used in virtual platforms and online games)
In conclusion, affiliate marketing benefits both merchants and affiliates, but it requires investing money and time. Consider your available resources, and choose a compensation method wisely.

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