Reporting For Affiliate Marketing

Affiliate marketing is an internet-based marketing model in which a business compensates independent publishers to create leads or traffic to the business of services and products. The independent publishers are usually affiliates, and the fee they receive incentivizes them to seek ways to advertise the business on their site. This may include creating advertising content, such as web pages or blog posts, that link back to the business's site. Some affiliate programs offer Pay Per Click (PPC) advertising options.

An alternative approach to affiliate marketing is to use the qualified leads approach, also known as the CPA or Cost Per Action (CPA) model. With the qualified leads approach, a business pays affiliates only for qualified leads. These contacts are obtained by contacting other people with information about the product or service being promoted. Affiliates earn commissions only when they produce a lead for the business and then contact the promoter to further develop a relationship.

Many companies offer affiliate marketing programs in which affiliates earn a commission on sales of a given product or service. Others, called super affiliates, receive free advertising and marketing opportunities as a valued customer. In affiliate marketing, commission percentages vary widely between advertisers and affiliates. The lowest common commission is 10 percent. In addition to commission payments, some affiliate marketing programs provide incentives, such as website design training, or access to special software, tools and databases. Some programs have provisions for a payout in the event that a campaign does not generate enough sales to reach the established thresholds.

For merchants and affiliates who do not want to undertake the additional cost of employing a marketing department, there are a number of affiliate marketing solutions available at low-cost or no cost. One is to build a website or blog, promote the product or service through email, or use other Internet advertising methods to drive traffic to the merchant's site. Another option is to build a mailing list, follow up with customers periodically via email, or provide useful content via an Internet website. Either way, affiliates can promote a product or service without the financial risk of employing a team of professionals.

Affiliate networks and affiliate marketing programs can also provide affiliates with the opportunity to build significant residual income streams. Residuals are money that comes from a source that pays commissions even after sales have been made. The most popular residual advertising models are pay-per-sale or pay-per lead programs. Through these programs, affiliates are compensated only for the sales they generate, and not based solely on the results of initial advertising efforts.

In order to join an affiliate marketing program, an affiliate must have a website or blog with relevant content that stirs consumer interest. This content should be closely related to the products or services offered by the merchant. Merchants offer affiliates a commission if a visitor to their website makes a purchase based on the content found on the affiliate's site. For example, a website visitor who finds information about running shoes might be encouraged to click on a link that leads them to a page with information about a new tennis shoe product. If the shoe product is the subject of affiliate marketing advertising, the affiliate would earn commissions when customers make purchases based on this specific affiliate marketing program content.

Some affiliate marketing programs offer significantly high commission rates, particularly if the customer sells a substantial amount of products. These commissions are typically higher than other revenue sharing plans, such as pay per lead or pay per sale programs. The highest commissions are reserved for select affiliate products and programs, so prospective affiliates should perform due diligence before signing up for a specific merchant's program. It is also important to realize that some merchant programs require minimum sales or purchase amounts before beginning to earn commissions.

One of the most important aspects of an affiliate marketing program is its conversion rate. The conversion rate is the percentage of the total number of clicks generated from the affiliate links on the site that result in a purchased product. For example, if the site has one hundred thousand clicks on its landing pages, this means that roughly one hundred clicks resulted in a purchase.