Affiliate Marketing is a method of Online Marketing that is frequently employed by businesses both as a revenue stream and advertising medium. However, Affiliate Marketing is quite complex, and as a result often leads to fragmented explanations. For this reason, we have chosen to use a fictional example to illustrate Affiliate Marketing and improve your understanding of the concept.
Bob from Gym Equipment Pty Ltd has a website that he wishes to advertise in order to increase traffic. He finds out about a blogging website called “Obsessed with Gym” which targets the same audience and appears to have good search engine rankings and a high volume of traffic. Bob decides it would be an appropriate site to advertise his website on. He contacts Mary, the owner of Obsessed with Gym, and organises for Mary's website to be an Affiliate Partner of Bob's website. This means Bob can advertise on Mary's site in exchange for commissions. The commissions are paid whenever someone performs Bob's desired action, such as Clicks-through from Mary's website to his.
Desired actions can take different forms and are pre-arranged between the parties. The most common are when a referred customer makes a purchase (Pay-Per-Sale) or fills out a contact sheet (Pay-Per-Lead). This sort of Affiliate Marketing Program is commonly referred to as Pay-Per-Action. Another common type of Affiliate Marketing is Pay-Per-Click. To run with the example from above, this is where Bob pays Mary every time someone clicks through from Mary's website to Bob's.
What types of businesses would benefit from Affiliate Marketing?
Affiliate Marketing is a handy tool for most types of businesses. It is extensively used by start ups and smaller companies with small marketing budgets. This is because, like in Pay-Per-Click Advertising, results are measurable and spending can be justified. However, by no means is Affiliate Marketing, as a form of Online Marketing, limited only to small businesses and start ups. Many large organisations use Affiliate Marketing extensively and as a part of their broader Online Marketing strategies.
What value will Affiliate Marketing add to my campaign?
Affilliate Marketing is a great addition to any Online Marketing campaign and can add high value. This is because typically, either a percentage of sale or dollar amount per action is paid in commission, which, if carried out effectively, can be accurately calculated and measured to ensure the Affiliate Marketing Program's profitability.
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