According to Magnum (2005), Affiliate marketing is a cooperative effort between merchant and an affiliate’s website. When customers want to buy a product, they can use searching engine like Google and simply typing in the key words. Then they will find the direct links of those online stores which use affiliate marketing with Google. Affiliate marketing is a popular online business idea. It creates great opportunities for business earning income online. The great advantages for the affiliate marketer are that they do not need to create their own product; they do not need to worry about purchasing, warehousing and shipping to customers. Affiliate marketers need to recommend other people’s products in order to gain commission. They also need to create attractive website to generate more traffic, and then send the traffic to the merchant’s site.
On the other side, affiliate marketing creates many benefits for merchant. For example, using affiliate marketing can increase the numbers of target markets and it has low risk. According to Magnum (2005), more sites will naturally create more sales, if the sites merchant have chosen to use are in their niche marketing. Affiliate marketing provides merchant a bigger market to sell their product. For example, when customers search “dining table” at Keycode.com, Keycode.com will show them many direct links to the stores which sell things related to dining table. By using affiliate marketing, it will give the store a chance to reach people who are not in their target market. Therefore, it leads an increase of total target markets and sales revenue. Furthermore, the paying system of Keycode.com is based on Pay Per Sale. There are no any up-front fees, clients pay nothing until a Keycode.com offer is actually used by a shopper. Pay Per Sale has relative lower risk because marketers only need to pay when customers exactly purchase products through the affiliates’ websites. Moreover, marketers do not need to worry about if they get fraud from affiliates’ websites due to no joining fee for most affiliate websites.
As Digital Web Marketing (2008) indicated there are three ways to make money with affiliate marketing. It includes Pay Per Click (PPC), Pay Per Sale and Pay Per Lead. Pay Per Click heavily depends on the keyword in the ad link. When customers click the ad on affiliate website and the link lead them to the merchant’s website. Affiliate earns certain amount commission. Pay Per Lead does not involve selling. It collects information when website visitors fill out a survey or give out their email address. It generates a lead for an affiliate. If the lead makes a sale, then there will be a commission.
In order to become a good affiliate and maximize the profits from the website, the Internet Marketing Center (2009) explained that affiliate marketers should focus on areas as follows:
- Define a niche market and target the affiliate products to that market.
- Build the good relationship and trust with website visitors. For example, sending regular emails, building blog comments and providing opinions from expertise.
- Constantly finding new ways to market the products such as create attractive web design to engage more visitors.
- Create “sticky” website. Affiliate marketers should create rich and useful content such as product comparisons, newsletters, helpful tips and contests etc.
- Constantly test marketing strategies in order to convert visitors to actual buyers.
Overall, affiliate marketing has many benefits for both affiliate marketers and merchant. It has great power to generate income online.
Reference
Magnum, T. (2005) What are the Benefits of Affiliate Marketing? [Internet]. Available from: <http://ezinearticles.com/?What-are-the-Benefits-of-Affiliate-Marketing?&id=41437> [Accessed 25 November 2009].
What is Affiliate Marketing & MoreNiche ? [Internet], MoreNiche LTD. Available from: <http://images.google.ca/imgres?imgurl=http://www.moreniche.com/img/mn-graphic-affiliate-how-works.gif&imgrefurl=http://www.moreniche.com/affiliates-how-it-works.php&usg=__adDdApNH59kHKRoAgq16fNUzrNo=&h=297&w=572&sz=29&hl=en&start=32&tbnid=wp91RUHGlI5jkM:&tbnh=70&tbnw=134&prev=/images%3Fq%3Daffiliate%2Bmarketing%26gbv%3D2%26ndsp%3D18%26hl%3Den%26sa%3DN%26start%3D18> [Accessed 25 November 2009].
