Affiliate marketing is a popular online marketing model where a business compensates third party publishers to generate leads or traffic to their products and services for them. The third party publishers are referred to as affiliates, and the fee they get for doing so incentivises them to find different ways to market the business. The affiliate is provided with a unique link to the publisher's site containing relevant content which they can use to drive traffic directly to the merchant's site. This link can then be used by the merchant to send customers direct to their site. There are several advantages to affiliate marketing.
One of the most obvious advantages is that there is no need to develop your own products, and you do not have to manage your own inventory or fulfil customer orders. When using an affiliate marketing model, you are essentially acting as an affiliate manager, looking after pay per sale requirements of the merchant and directing targeted traffic to their sales page. The merchant only pays you when customers make a purchase from their site and then get a voucher entitling them to a full refund of the amount they have spent.
In this way, an affiliate marketing campaign is low cost advertising. It is cost effective because you only pay for qualified leads rather than spending money upfront on advertising. The advertiser pays you a commission based on the number of qualified leads that are generated by your links. As you can see, the costs are split between you, the publisher and the advertiser resulting in very little direct outlay and a large upfront saving.
The other advantage of affiliate marketing over other internet advertising models is that there are few if any genuine risk factors. The advertiser pays you only for those customers who make a purchase from your website and then visit your site. You do not have to worry about whether the customer will like what they see and decide to buy through your link. Your only risk is time. If you are slow in developing a buzz, or if you don't update your website frequently, you may find that your maximum earning potential is diminished.
An affiliate marketing program is therefore low risk for both the affiliate marketer publisher. But there are still some risks involved in this business. For example, not every affiliate marketing program is free from spyware and malware, your website may be hacked without your knowledge and you may lose your site if you choose to pay for a one off marketing campaign rather than a monthly maintenance plan. Other common problems include poor website design and poor content.
So what can you do to make your affiliate marketing business model even more attractive to affiliates? Firstly, you need to ensure that it is easy to navigate and that it has a professional appearance. Secondly, you should ensure that there are no hidden costs involved. The only cost that you really have to worry about in this business model is time and effort. If you can give a reasonable deadline for your work and can publish your work on a regular basis then you will build up a good reputation and that will attract other affiliates who have similar products or service to your own. You also need to create something that your customers will value and want to know about.
An affiliate marketing program that employs pay-per-click advertising as its main form of advertising will require that you develop a PPC budget. This can be a lot of money at first but it does have a low barrier of entry for new affiliates and it also offers very high visibility. PPC advertising has proven to be very effective for the small business owner who wants to get a presence on the internet. Advertisements are usually displayed on websites owned by the affiliate marketing program which helps the publisher because he can direct his visitors to his website where he can sell them his product. This can be a very high margin business and you have the advantage of instant sales when people click on your advertisement.
Although affiliate marketing offers all the advantages to established businesses it does have a few disadvantages as well. There are thousands of affiliate programs out there and not every business model works the same for every business. You could end up spending more time managing your affiliate program than making sales. Another disadvantage of affiliate marketing is that very few people understand it. You will have to spend a lot of time and effort learning how it works if you want to benefit from it.
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