Linkedin.com Lisa Hahn Affiliate Marketing Manager

Affiliate marketing has been around as long as there have been markets to sell products and services. In recent years, affiliate marketing has exploded into a billion-dollar industry with companies paying generous commissions to affiliates for referring customers to them. Affiliate marketing is essentially a form of performance-based selling where a company rewards one or more affiliates per visitor or customer brought about by the affiliate's marketing efforts. The actual earnings from the affiliate marketing program depend largely on the amount of work the affiliate is willing to put into their efforts as well as the effort that the affiliate marketer exerts to market the product or service through their own efforts.

The cost per action (CPA) and cost per sale (CPS) are often referred to interchangeably, and the price of a CPA campaign will be determined by the size and nature of the affiliate marketing effort. Cost Per Action (CPA) campaigns cost the advertiser only if a visitor or customer purchases a product or service. Typically, the cost per action campaign is much smaller in overall revenue terms than a traditional pay-per-click (PPC) campaign. On the other hand, a very large CPA campaign can potentially bring in high monetary returns for the advertiser if it is directed at a highly targeted group of customers.

To keep costs down and revenue up, affiliate marketing managers often coordinate efforts between affiliates and the advertising agencies. Many management tools are used to streamline the affiliate marketing process and minimize duplication of effort. The majority of affiliate managers are paid on a commission basis, which gives them a great deal of flexibility in determining what affiliates to run a particular campaign against. It also allows the manager to take full advantage of some of the creative strategies and technologies emerging in the affiliate marketing field. Most of the time, an affiliate marketing manager will have a background in advertising or a related field and will therefore be able to integrate the new technology into their campaigns.

Affiliate management tools also help to streamline the affiliate marketing process. One such tool is the creation of affiliate links. These links can point the affiliate to a website where the advertiser offers a product or service to be purchased. The affiliate is paid a commission based on the sale price and the number of clicks made by the visitor or client after clicking the affiliate link. The number of clicks can be controlled by the manager; however, most affiliates choose a fixed number that ensures maximum compensation.

Another way to integrate affiliate marketing into the advertising field is through the use of contextual advertising. Contextual advertising refers to using ads that are targeted based on keywords that are entered into programs such as Google AdWords or Microsoft ad Center. This targeting gives affiliates a unique opportunity to advertise to a select group of people. Because most merchants are already offering contextual advertising through their websites, affiliates do not need to create separate web pages to gather information about prospective customers. The ability to directly target potential customers eliminates the need for the advertiser to build a list, maintain a database, or retain the mailing list of the affiliate.

Cost per Action (CPA) and revenue sharing are two of the more popular forms of affiliate marketing. Cost per Action is usually associated with online banner advertising, while revenue sharing comes from programs such as AdSense and ClickBank. Cost per Action is usually seen as a faster method of earning affiliate commissions because it does not require the advertiser to pay for the actual sale. Because of this lack of investment, CPA can be a viable option for advertisers who cannot afford to spend money on pay per click advertising. Cost per Action can also generate large sums of revenue since advertisers only pay when someone clicks on the affiliate link.

There are many aspects of affiliate marketing that need to be monitored and controlled. For example, there are many affiliate networks to choose from including Commission Junction, Linkshare, Clickbank, LinkShare and more. The affiliate network the affiliate uses must support its partners in order for the partnership to work effectively. Monitoring these various affiliate networks is the responsibility of the affiliate management company.

If your business is serious about affiliate marketing, you should invest in a good affiliate marketing software program. These software programs track the amount of time your affiliates spend on your site, which enables you to see how much revenue you can expect. The software will also help you detect any problems, such as adware, spyware, or invalid entries, so you can stop them from ruining your affiliates' experience.