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What is affiliate marketing?Affiliate marketing is a type of performance-based marketing in which a business rewards oneor more affiliates for each visitor or customer brought about by the affiliates own marketingefforts. The industry has four core players: the merchant (also known as retailer or brand),the network (that contains offers for the affiliate to choose from and also takes care of thepayments), the publisher (also known as the affiliate), and the customer.Affiliates often use regular advertising methods like organic search engine optimization (SEO),paid search engine marketing (PPC - Pay Per Click), e-mail marketing, SMS marketing, Socialmedia marketing, telesales and in some sense display advertising, publishing reviews ofproducts or services offered by a partner.Eighty percent of affiliate programs today use revenue sharing or pay per sale (PPS) as acompensation method, nineteen percent use cost per action (CPA), and the remainingprograms use other methods such as cost per click (CPC) or cost per mile (CPM).Cost per mille requires only that the publisher make the advertising available on his websiteand display it to his visitors in order to receive a commission. Pay per click requires oneadditional step in the conversion process to generate revenue for the publisher: A visitor mustnot only be made aware of the advertisement, but must also click on the advertisement to visitthe advertisers website. Cost per click was more common in the early days of affiliatemarketing, but has diminished in use over time due to click fraud issues very similar to the clickfraud issues modern search engines are facing today. Cost per action/sale methods require thatreferred visitors do more than visit the advertisers website before the affiliate receivescommission. The advertiser must convert that visitor first. It is in the best interest for theaffiliate to send the most closely targeted traffic to the advertiser as possible to increase thechance of a conversion. The risk and loss is shared between the affiliate and the advertiser.An affiliate network acts as an intermediary between publishers (affiliates) and merchantaffiliate programs. It allows website publishers to more easily find and participate in affiliateprograms which are suitable for their website (and thus generate income from thoseprograms), and allows websites offering affiliate programs (typically online merchants) to reacha larger audience by promoting their affiliate programs to all of the publishers participating inthe affiliate network. Affiliate network services and benefits may include tracking technology,reporting tools, payment processing, and access to a large base of publishers. For affiliates,services and benefits can include simplifying the process of registering for one or moremerchant affiliate programs, reporting tools, and payment aggregation.
How affiliates choose merchants?As there are thousands upon thousands of affiliate programs offered by various Internetmerchants there are several things that affiliates consider before joining the programs.First and foremost, affiliates consider site visitors’ propensity to purchase the product or serviceor take the ‘desired action’ (filling out a lead form, download trading platform etc.). Thegreatest factor here is the attractiveness of the merchant’s site and offer, but also ability toproperly pre-sell the product or service and interest in doing so. For that merchant has toprovide good creative materials as well.Second thing affiliates looks is the affiliate agreement either on the site or affiliate network.Affiliate agreement is very important as it notes out all the way how merchant can bepromoted and what is prohibited.Third affiliates compare the earning potential by the commission amount, action needed, EPC,conversion rate and CTR. A program that pays $5 per lead may be far more attractive than oneoffering an average commission of $25 per sale. Using this example, if 10 out of 100 referralssubmit a lead form, affiliate will earn $50, with an effective EPC of $.50. If just one in 100 ofreferrals make a purchase, affiliate earns $25 with an effective EPC of $.25. Next affiliatesconsider the volume of click-trough’s, which is not part of the EPC measurement. In otherwords, if very few of affiliate site visitors click on the lead campaign and many more click on theper sale campaign, you could end up earning more total commission on the per sale campaign,even though it does not convert as well.Forth important thing affiliates look is cookie lifetime. Cookie lifetime refers to the length oftime a cookie is set on referral’s computer to allow affiliate to earn commissions even if thereferral returns directly to the merchant’s site. The importance of return days will depend onthe length of time a customer typically takes to decide to purchase a particular product. As ageneral rule programs cookie lifetime minimum is 30 days. If the cookie lifetime is long anaffiliate could be compensated for future purchases – for example repeated sales.Fifth affiliates look very closely is the leakage. Leakage is how often there areproblems/difficulties with tracking conversions and affiliate does not get commissions. Forexample: Phone Orders and other tracking issues – orders by phone are not tracked etc Participation of Parasite Affiliates – parasites are affiliates who will intercept your referrals and claim the commissions for themselves. Payment problems - merchants who do not pay as they have promised or are very slow payers.
Not less important is affiliate program management and support that affiliate needs topromote this merchant. Best is to provide full contact information for an individual affiliates canreach with your questions or comments. Generic affiliate email is also an option, but does notgive such trustworthiness. In the worst case affiliate request are handled by customer service -affiliates find this unresponsive to their inquiries.Last, but not less important is reporting – it is important that affiliate is able toview hisperformance in real time or at least updated daily.
How merchants choose affiliate networks?There are a few important things to keep in mind when selecting a network:Cost to the merchant – how much fees they take? Do they have set up fees, transactions fees,monthly fees, fixed threshold as a fee?Number of active affiliates – how many affiliates network has and do they have websites inyour field – finance websites for example. How many affiliates are active in the network?Specific industries a network focuses on or has success in – is the network specialized in onesector or has wide range of different affiliates on broad?The services and support provided to the merchant - Are they offering a lot of support andideas how to expand further? Are the account managers skilled enough? How flexible are theyoffering customized service?The acceptable methods of promotions by affiliates–Do they accept incentive traffic?Types of programs they specialize in - Pay Per Lead, Pay Per Sale, Co-RegistrationBrand reach – are they promoting their selves in popular affiliate hiring sites? Do they have bigcompanies on board?Brand review – Are the reviews good or bad? Do they talk about non-payment or other seriousissues? How fast are the payments to affiliates? What famous or popular bloggers have bloggedabout those networks?Do affiliates like this network in general?Tracking Sophistication - Reliable and honest tracking through the network should be alwaysprovided. The latest tracking technologies should be in place, and detailed reporting should beavailable to both you (the merchant), and the affiliates (the publishers) of the network. Inaddition to basic transaction reports, each network has their own unique reporting features,including performance by link type and affiliate first sale reports.Fraud Protection - What kind of safeguards does the affiliate network have in place to protectboth merchants and publishers from fraud? This is something that should especially be aconcern if you choose to go with a CPC (cost-per-click) model.Affiliate Program Promotion -After you sign up as a merchant, what will affiliate network do toget the word out about the program to its publishers? Will it include your program in itsnewsletter and e-mailings, place a link on its website, issue a press release, or promote as a"client" on a merchant list on their website?
Types of affiliate websitesAffiliate websites are often categorized by merchants (advertisers) and affiliate networks. Search affiliates that utilize pay per click search engines to promote the advertisers offers (i.e., search arbitrage) Comparison shopping websites and directories Loyalty websites, typically characterized by providing a reward system for purchases via points back, cash back CRM sites that offer charitable donations Coupon and rebate websites that focus on sales promotions Content and niche market websites, including product review sites Personal websites Weblogs and website syndication feeds E-mail list affiliates (i.e., owners of large opt-in -mail lists that typically employ e-mail drip marketing) and newsletter list affiliates, which are typically more content-heavy Registration path or co-registration affiliates who include offers from other merchants during the registration process on their own website Shopping directories that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updates Cost per action networks (i.e., top-tier affiliates) that expose offers from the advertiser with which they are affiliated to their own network of affiliates Websites using adbars (e.g. Adsense) to display context-sensitive, highly relevant ads for products on the site Virtual Currency: a new type of publisher that utilizes the social media space to couple an advertisers offer with a handout of "virtual currency" in a game or virtual platform. Video Blog: Video content that allows viewers to click on and purchase products related to the videos subject. File-Sharing: Web sites that host directories of music, movies, games and other software.
Promotional materials(in different languages) that can be offered to affiliates: Banners: jpeg, gif, png Banners: flash Banners: text Banners: rotating Landing Pages/Microsites Corporate seals/teasers Brand Products Certificates Widgets/Informers Avatars Videos & Tutorials Articles & Reviews Mailers: html Online classes/Edu Materials News feed RSS feed Booklets Datafeed
Affiliate performance tracking and statisticsThe methods of tracking affiliate conversions continue to evolve as the internet constantlychanges and advances. The most common method today is Cookie tracking so it will bediscussed in most detail.Common tracking methods include: Cookie Tracking Simple Direct URL Links URL Query String Tracking Self-Replicated Pages Sub Domain Tracking Database Record Match TrackingCookie TrackingCookie Tracking is the most popular method to track web visitors "from click through toconversion", because it is simple to implement and use, requires no significant web designconsiderations, and rarely does it impact the performance of the web server. With this methoda 3rd-party affiliate software program can be installed as a stand-alone product requiringminimal changes to your existing web site.Affiliates place the merchants affiliate links on their web site. The affiliate link defines theAffiliate ID within the link. The web visitor clicks the link and is sent to the affiliate trackingsoftware. The affiliate tracking software plants a small text file or "cookie" on the web visitorsbrowser. This cookie stores the Affiliate ID. It may also store other information such as thedate/time for purposes of tracking how much time elapsed between the click and theconversion. It may also track the specific banner or link that the web visitor clicked. The cookieis also assigned a date as to when it should expire and get deleted.After planting the cookie, the web visitor is then redirected to the page that was defined for thespecific banner or link that was clicked. It could be the homepage of the merchants web site,or a specific product or information page.As the web visitor traverses the merchants site, the cookie remains untouched and continuesto hold the Affiliate ID. The cookie is retained for the "cookie expiration period" as defined inyour affiliate tracking software. The beauty of this is you can still track a conversion even if ithappens days or weeks after the first visit. You can also track repeat sales from the web visitor.
This method, though fairly effective, is a bit fragile and cumbersome, as it requires carefuldesign of the website and maintenance of every link within the merchants site. Moreover,under heavy traffic, the script can become a "bottleneck" to the merchants web site.Furthermore, if the script ever fails, the merchants site will fail.Self-Replicated PagesSelf-Replicated Pages (SRPs), offers the affiliate a replicated copy of the merchants web site. Itcould be as simple as one page, or as much as an entire replica of the site. These pages arethen used exclusively by the web visitors sent from the affiliates web site. Tracking is easybecause all sales made from this replica are attributed to the affiliate for whom the replica wascreated. This type of affiliate tracking is typically built in to the merchants shopping cartsystem rather than as a stand-alone affiliate tracking software solution.While this method may sound great, there is a major drawback. This method was once popularbut is now frowned upon in the affiliate marketing industry. The reason is popular searchengines such as Google often penalize sites for replicating identical content. This reason alonehas greatly diminished the use of this method.Sub Domain TrackingSub Domain Tracking is very similar to Self-Replicated Pages, in that it provides an affiliate witha full URL to which the affiliate can direct customers. Unlike Self Replicated Pages, though, thismethod gives affiliates an actual sub domain at the merchants site, not a simple directory pathfound at the merchants main domain. Just as in the method of self-replicated pages, thismethod results in duplicated content and again you risk having your organic search enginelistings penalized for duplicate content.Database Record MatchingDatabase record matching (also called "lifetime affiliate tracking") is the least used of themethods because it is difficult to operate and maintain, and must be used in conjunction withat least one of the other tracking methods; it cannot be used alone. Database Record Matchingrewards affiliates for returning customers, not new customers. The initial sale must employsome other form of referral tracking, and then store unique contact information about eachcustomer (their email address, name and address, credit card number, etc), along with thereferring affiliates ID. When that customer returns and buys again in the future, the customerdatabase can be searched to find that the customer is "owned" by an affiliate. This affiliate willreceive commissions on that customers repeat purchases for the life of the system
Affiliate marketing Glossary-A- A/B testing – a method in marketing research where variables in a control scenario are changed and the ensuing alternate strategies tested, in order to improve the effectiveness of the final marketing strategy. above the fold – the section of a Web page that is visible without scrolling. ad blocking – the blocking of Web advertisements, typically the image in graphical Web advertisements. ad space – the space on a Web page available for advertisements. AdSense – a text-based advertisement service provided by Google.com. advertising network – a network representing many Web sites in selling advertising, allowing advertising buyers to reach broad audiences relatively easily through run-of- category and run-of-network buys. affiliate – the publisher/salesperson in an affiliate marketing relationship. affiliate directory – a categorized listing of affiliate programs. affiliate forum – an online community where visitors may read and post topics related to affiliate marketing. affiliate fraud – bogus activity generated by an affiliate in an attempt to generate illegitimate, unearned revenue. affiliate marketing – revenue sharing between online advertisers/merchants and online publishers/salespeople, whereby compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model. affiliate merchant – the advertiser in an affiliate marketing relationship. affiliate network – a value-added intermediary providing services, including aggregation, for affiliate merchants and affiliates. affiliate software – software that, at a minimum, provides tracking and reporting of commission-triggering actions (sales, registrations, or clicks) from affiliate links. ALT text – HTML attribute that provides alternative text when non-textual elements, typically images, cannot be displayed. animated GIF – a graphic in the GIF89a file format that creates the effect of animation by rotating through a series of static images. anonymous FTP – an option in FTP that allows users to download files without having to establish and account. autoresponder – a program that sends an automatic form response to incoming emails.-B- B2B – business that sells products or provides services to other businesses. B2C – business that sells products or providse services to the end-user consumers.
banner ad – a graphical web advertising unit, typically measuring 468 pixels wide and 60 pixels tall (i.e. 468×60). banner blindness – the tendency of web visitors to ignore banner ads, even when the banner ads contain information visitors are actively looking for. banner exchange – network where participating sites display banner ads in exchange for credits which are converted (using a predetermined exchange rate) into ads to be displayed on other sites. barter – to exchange goods or services directly without the use of money. beyond the banner – online advertising not involving standard GIF and JPEG banner ads. blog – A frequent, chronological publication of personal thoughts and Web links. blogger – 1. a person who publishes content on the web using a blog 2. a blog service powered by Google.com blogosphere – the community of blogs and everything else related to them. blogroll – a section of a blog page that contains a list of links to recommended blog sites. bookmark – a link stored in a Web browser for future reference. bounce rate – 1.) In web analytics, the percentage of visitors who leave after viewing a single page. 2.) In email marketing, the percentage of emails in a campaign that are undeliverable. button ad – a graphical advertising unit, smaller than a banner ad. button exchange – network where participating sites display button ads in exchange for credits which are converted (using a predetermined exchange rate) into ads to be displayed on other sites. buzzword – a trendy word or phrase that is used more to impress than explain.-C- caching – the storage of Web files for later re-use at a point more quickly accessed by the end user. call to action (CTA) – the part of a marketing message that attempts to persuade a person to perform a desired action. cascading style sheets (CSS) – a data format used to separate style from structure on Web pages. click-through – the process of clicking through an online advertisement to the advertiser’s destination. click-through rate (CTR) – The average number of click-throughs per hundred ad impressions, expressed as a percentage. comment spam – irrelevant comments posted to a blog for the sole purpose of dropping a link to the spammer’s website. contextual advertising – a method of serving advertisements based on the content (i.e., overall context or theme) of a web page. conversion rate – the percentage of visitors who take a desired action.
cookie – information stored on a user’s computer by a Web site so preferences are remembered on future requests. cost-per-action (CPA) – online advertising payment model in which payment is based solely on qualifying actions such as sales or registrations. cost per click (CPC) – the cost or cost-equivalent paid per click-through. CPM – cost per thousand impressions. customer acquisition cost – the cost associated with acquiring a new customer.-D- dedicated IP – an IP address dedicated to a single website. deep linking – linking to a web page other than a site’s home page. description tag – an HTML tag used by Web page authors to provide a description for search engine listings. disintermediation – the elimination of intermediaries in the supply chain, also referred to as "cutting out the middlemen." domain name – location of an entity on the Internet. doorway domain – a domain used specifically to rank well in search engines for particular keywords, serving as an entry point through which visitors pass to the main domain. doorway page – a page made specifically to rank well in search engines for particular keywords, serving as an entry point through which visitors pass to the main content.-E- email – the transmission of computer-based messages over telecommunication technology. email marketing – the promotion of products or services via email. email spam – unwanted, unsolicited email. exclusivity – contract term in which one party grants another party sole rights with regard to a particular business function. ezine – an electronic magazine, whether delivered via a Web site or an email newsletter. ezine directory – directory of electronic magazines, typically of the email variety.-F- favicon – a small icon that is used by some browsers to identify a bookmarked Web site FFA – free-for-all links list, where there are no qualifications for adding a link.
Flash – multimedia technology developed by Macromedia to allow much interactivity to fit in a relatively small file size. forum – an online community where visitors may read and post topics of common interest. frames – a structure that allows for the dividing of a Web page into two or more independent parts. freemium – a technique where a business offers a free basic product, giving the customer an option to use an advanced version for a premium cost. frequency cap – restriction on the amount of times a specific visitor is shown a particular advertisement.-G- geo-targeting – a method of detecting a website visitor’s location to serve location- based content or advertisements. Google Instant – a feature of Google’s search engine that shows search results as the keyword query is being typed. guerilla marketing – unconventional marketing intended to get maximum results from minimal resources guest blogging – writing a blog post to be published on another blog as a temporary featured author.-H- heatmap – a graphical representation of data where varying degrees of a single metric are shown using colors. hit – request of a file from a Web server. home page – the main page of a Web site. house ad – self-promotional ad a company runs on their own site/network to use unsold inventory. HTML banner – a banner ad using HTML elements, often including interactive forms instead of (or in addition to) standard graphical elements. HTML email – email that is formatted using Hypertext Markup Language, as opposed to plain text email. hybrid model – a combination of two or more online marketing payment models-I- impression – a single instance of an online advertisement being displayed. inbound link – a link from a site outside of your site.
-M- manual submission – adding a URL to the search engines individually by hand. media kit – a resource created by a publisher to help prospective ad buyers evaluate advertising opportunities. meta search engine – a search engine that displays results from multiple search engines. META tag generator – tool that will output META tags based on input page information. META tags – tags to describe various aspects about a Web page. moderator – at a forum, someone entrusted by the administrator to help discussions stay productive and within the guidelines. mousetrapping – the use of browser tricks in an effort to keep a visitor captive at a site, often by disabling the "Back" button or generated repeated pop-up windows. multivariate testing – a method in marketing research where multiple variables in a control scenario are simultaneously changed and the ensuing alternate strategies tested, in order to improve the effectiveness of the final marketing strategy.-N- navigation – that which facilitates movement from one Web page to another Web page. netiquette – short for network etiquette, the code of conduct regarding acceptable online behavior. network effect – the phenomenon whereby a service becomes more valuable as more people use it, thereby encouraging ever-increasing numbers of adopters.-O- opt-in email – email that is explicitly requested by the recipient. opt-out – (1) type of program that assumes inclusion unless stated otherwise. (2) to remove oneself from an opt-out program. organic search – the unpaid entries in a search engine results page that were derived based on their contents’ relevance to the keyword query. outbound link – A link to a site outside of your site.-P- page view – request to load a single HTML page. pagejacking – theft of a page from the original site and publication of a copy (or near- copy) at another site. pass-along rate – the percentage of people who pass on a message or file.
pay per click (PPC) – online advertising payment model in which payment is based solely on qualifying click-throughs. pay per click search engine (PPCSE) – search engine where results are ranked according to the bid amount and advertisers are charged only when a searcher clicks on the search listing. pay per lead (PPL) – online advertising payment model in which payment is based solely on qualifying leads. pay per sale (PPS) – online advertising payment model in which payment is based solely on qualifying sales. payment threshold – the minimum accumulated commission an affiliate must earn to trigger payment from an affiliate program. permission marketing – marketing centered around getting customer’s consent to receive information from a company. podcast – a series of audio or video files that are syndicated over the Internet and stored on client computing devices for later playback. pop-under ad – an ad that displays in a new browser window behind the current browser window. pop-up ad – an ad that displays in a new browser window. portal – a site featuring a suite of commonly used services, serving as a starting point and frequent gateway to the Web (Web portal) or a niche topic (vertical portal).-R- rate card – document detailing prices for various ad placement options. reciprocal links – links between two sites, often based on an agreement by the site owners to exchange links. rectangle ad – any one of the large, rectangular banner sizes suggested by the IAB. rep firm – ad sales partner specializing primarily in single-site sales. return days – the number of days an affiliate can earn commission on a conversion (sale or lead) by a referred visitor. return on investment (ROI) – the ratio of profits (or losses) to the amount invested. rich media – new media that offers an enhanced experience relative to older, mainstream formats. run of network (RON) – ad buying option in which ad placements may appear on any pages on sites within an ad network. run of site (ROS) – ad buying option in which ad placements may appear on any pages of the target site.-S-
search engine – a program that indexes documents, then attempts to match documents relevant to the users search requests. search engine optimization – the process of choosing targeted keyword phrases related to a site, and ensuring that the site places well when those keyword phrases are part of a Web search. search engine spam – excessive manipulation to influence search engine rankings, often for pages which contain little or no relevant content. search engine submission – the act of supplying a URL to a search engine in an attempt to make a search engine aware of a site or page. search retargeting – the use of a site visitor’s search history as a basis for the ads that the visitor will see. search spy – a perpetually refreshing page that provides a real-time view of actual Web searches. self-serve advertising – advertising that can be purchased without the assistance of a sales representative. SERP – shorthand for a page of search engine listings, typically the first page of organic results. sig file – a short block of text at the end of a message identifying the sender and providing additional information about them skyscraper ad – an online ad significantly taller than the 120×240 vertical banner. social networking – the process of creating, building, and nurturing virtual communities and relationships between people online. spam – inappropriate commercial message of extremely low value. splash page – a branding page before the home page of a Web site. sponsorship – advertising that seeks to establish a deeper association and integration between an advertiser and a publisher, often involving coordinated beyond-the-banner placements. stickiness – the amount of time spent at a site over a given time period. super affiliate – an affiliate capable of generating a significant percentage of an affiliate program’s activity. surround session – advertising sequence in which a visitor receives ads from one advertiser throughout an entire site visit.-T- text ad – advertisement using text-based hyperlinks.
text link exchange – network where participating sites display text ads in exchange for credits which are converted (using a predetermined exchange rate) into ads to be displayed on other sites. title tag – HTML tag used to define the text in the top line of a Web browser, also used by many search engines as the title of search listings. trick banner – a banner ad that attempts to trick people into clicking, often by imitating an operating system message. two tier affiliate program – affiliate program structure whereby affiliates earn commissions on their conversions as well as conversions of webmasters they refer to the program.-U- underdelivery – delivery of less impressions, visitors, or conversions than contracted for a specified period of time. unique visitors – individuals who have visited a Web site (or network) at least once in a during a fixed time frame. URL – location of a resource on the Internet.-V- vertical banner – a banner ad measuring 120 pixels wide and 240 pixels tall. viral marketing – marketing phenomenon that facilitates and encourages people to pass along a marketing message. vlog – a blog that publishes video content. volunter directory – a Web directory staffed primarily by unpaid volunteer editors.-W- Web browser – a software application that allows for the browsing of the World Wide Web. Web design – the selection and coordination of available components to create the layout and structure of a Web page. Web directory – organized, categorized listings of Web sites. Web hosting – the business of providing the storage, connectivity, and services necessary to serve files for a website. Web ring – a means for navigating a group of related sites primarily by going forward and backward. Web site traffic – the amount of visitors and vists a Web site receives. Web site usability – the ease with which visitors are able to use a Web site. whois – a utility that returns ownership information about second-level domains.
word-of-mouth marketing – a marketing method that relies on casual social interactions to promote a product. WordPress – a popular content management system that is available as a hosted service (wordpress.com) and self-hosted platform (wordpress.org).