Affiliate Marketing, how ever long you have spent on the Internet either as a user, provider of some service or product or as a business, you will have heard of affiliate programs. They are in themselves a means of providing commission based earnings for affiliate scheme members. Wikipedia describes Affiliate marketing as a ‘web-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts.’
The Internet offers a huge audience to the budding webmaster and a huge earning potential as a consequence, apart from selling advertising affiliate programs offer another method of making large gains from web site visitors, perhaps a greater income can be derived from targeted or relevant affiliate marketing to the content of the web site. Affiliate programs do after all offer a larger earning per click/sale than mere display of advertising. Let’s say for example that your web site specialises in offering webmaster resources, related affiliate programs will return a greater return because your audience will have an interest in buying particular products such as web hosting, so a web hosting affiliate program would be a very good commission earner for you.
The popularity of affiliate marketing amongst affiliate program members dictates the most popular methods of commission earning, with commission on actual sales generated being the most widely used commission method (at around 80% of programs offering that).
With each Affiliate Program comes different methods of earning the commission on offer, and the various terms to describe those methods are often presented in abbreviated form which makes for some confusion:
CPS (Cost per Sale, AKA PPS - Pay per Sale) – Commission is earned from sales generated, this is usually the highest money earner and the vast majority of affiliate programs offer this due to its overall popularity.
CPA (Cost per Action or Cost per Acquisition, aka PPA - Pay per Action, aka CPL - Cost per Lead, aka PPL - Pay per Lead) – commission is earned from broader specification of action, including a purchase, submission of a form or information or some other interaction with the affiliate program advertising in place.
CPM (Cost per ‘Mile’, note that the Latin term Mile means Thousand and this abbreviation is normally seen as Cost per Thousand and therefore can also be CPT, aka PPI - Pay per Impression) – earnings are made each time the affiliate advertising is viewed one thousand times.
CPC (Cost per Click, aka PPC - Pay per Click) – earnings are made each time the affiliate advertising is click on (such an action would normally send the user to the advertisers’ own content).
Choosing the right affiliate program has to be determined by the best earning potential, CPS/PPS obviously offers that as the commission earned from a single sale is normally greater than the commission from showing a thousand of adverts look tiny. Hence the reason for its much wider use than CPM/CPA/CPC programs.
Tracking methods are very important because the Affiliate Program member wants to be as certain as possible that all referrals/clicks and impressions are properly recorded towards earning their commissions.
There are two common methods of tracking, Cookie/Session Tracking and IP Tracking. Cookie tracking is by far the most widely used and most reliable. We have all heard about Cookies in our Internet browsing experience, the site visited or advert displayed places a tiny file in the visitors browser cache allowing for tracking of the what the visitor sees and will see following the placement of that data. There follows another two methods from cookie tracking that are important to the affiliate, 1zst party cookies and 3rd party cookies. In the first instance, the cookie originates from the domain being visited, for instance, with CPS programs the cookie is normally placed after the user has clicked on the advertising and come to the advertisers’ own web space. Third party cookies are more unreliable as this involves a cookie from another domain being added while visiting the domain with the advert, in today’s software environment and with the plethora of AntiSpyware products freely available to the end user, third party cookies often get ‘tagged’ as being ‘undesirable’ by the anti-spyware software and therefore fail to actually get placed and used in the users’ browsing. This is another reason that CPS programs are more popular.
Cookies also have lifetimes – a date at which they ‘die’ and have no valid use any more. So the next important consideration should be to the life set for the tracking cookie, 12 months is obviously very good and 30 day cookies are obviously not much good.
Payment Methods and Intervals
Another consideration for the affiliate program member, how and when will they get paid? Its common to offer online payment services (such as Paypal) to complete payment, and given the very safe operation of these services and their very wide use in Internet sales and purchasing they are a decent enough way to go. Check/cheque and bank transfers are great but often suffer bank penalties as a result of currency conversion whereas online payment services will hold the earnings int eh currency they are paid in, giving the recipient the choice of what they do with it – pay for goods in that currency or convert to their chosen currency and transfer to their bank or pay for goods in another currency. Converting currencies and transferring to banks with online payment services is often cheaper than banking a foreign currency check/cheque.
Payment intervals can vary, with the huge rise in Internet fraud and crime, affiliate programs often want to account for the ‘golden period’ of a transaction – there is normally a 90 day period in which a payee can claw back their payment if they have some ‘valid’ reason to do so. So affiliate program members can often expect to have to wait for 90 days or more from the date of earning that commission to receiving payment. That blank period can be worrying at the start of their membership and earnings, but of-course once the earnings start to come in they continue in a subsequent fashion, and its better to have a safe earning than one that will be clawed back from them as a consequence of some charge back.
Affiliate programs are the most widely used method to earn income from web site visitors, even shopping sites earn commission from targeted advertising from other or related sites owned by themselves or other companies.
To not get involved in affiliate programs is to not want to generate income from your web site and therefore be better equipped to build further develop your site and its place on the Internet.
There may not be such a thing as a free lunch, but there is such a thing as profit.
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