Affiliate Marketing From The Advertiser's Perspective

From the advertiser's perspective Pros and cons Merchants favor affiliate marketing because in most cases it uses a "pay for performance" model, meaning that the merchant does not incur a marketing expense unless results are accrued (excluding any initial setup cost). Some businesses owe much of their success to this marketing technique, a notable example being Amazon.com. Implementation options Some merchants run their own (in-house) affiliate programs using popular software while others use third-party services provided by intermediaries to track traffic or sales that are referred from affiliates (seeoutsourced program management). Merchants can choose from two different types of affiliate management solutions: standalone software or hosted services, typically called affiliate networks. Payouts to affiliates or publishers are either made by the networks on behalf of the merchant, by the network, consolidated across all merchants where the publisher has a relationship with and earned commissions or directly by the merchant itself. Affiliate management and program management outsourcing Main article: Affiliate managerSuccessful affiliate programs require significant work and maintenance. Having a successful affiliate program is more difficult than when such programs were just emerging. With the exception of some vertical markets, it is rare for an affiliate program to generate considerable revenue with poor management or no management ("auto-drive").Uncontrolled affiliate programs did still do aid rogue affiliates, who use spamming, trademark infringement, false advertising, "cookie cutting"[citation needed], typosquatting, and other unethical methods that have given affiliate marketing a negative reputation.The increased number of Internet businesses and the increased number of people that trust the current technology enough to shop and do business online allows further maturation of affiliate marketing.The opportunity to generate a considerable amount of profit combined with a crowded marketplace filled with competitors of equal quality and size makes it more difficult for merchants to be noticed. In this environment, however, being noticed can yield greater rewards.Recently, the Internet marketing industry has become more advanced. In some areas online media has been rising to the sophistication of offline media, in which advertising has been largely professional and competitive. There are significantly more requirements that merchants must meet to be successful, and those requirements are becoming too burdensome for the merchant to manage successfully in-house.An increasing number of merchants are seeking alternative options found in relatively new outsourced (affiliate) program management (OPM) companies, which are often founded by veteran affiliate managers andnetwork program managers. OPM companies perform affiliate program management for the merchants as a service, similar to advertising agencies promoting a brand or product as done in offline marketing. Types of affiliate websites Affiliate websites are often categorized by merchants (advertisers) and affiliate networks. There are currently no industry-wide standards for the categorization. The following types of websites are generic, yet are commonly understood and used by affiliate marketers.Search affiliates that utilize pay per click search engines to promote the advertisers' offers (i.e., search arbitrage)Comparison shopping websites and directoriesLoyalty websites, typically characterized by providing a reward system for purchases via points back, cash backCRM sites that offer charitable donationsCoupon and rebate websites that focus on sales promotionsContent and niche market websites, including product review sitesPersonal websitesWeblogs and website syndication feedsE-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-heavyRegistration path or co-registration affiliates who include offers from other merchants during the registration process on their own websiteShopping directories that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updatesCost per action networks (i.e., top-tier affiliates) that expose offers from the advertiser with which they are affiliated to their own network of affiliatesWebsites using adbars (e.g. AdSense) to display context-sensitive, highly relevant ads for products on the siteVirtual Currency: a new type of publisher that utilizes the social media space to couple an advertiser's 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 video's subject.File-Sharing: Web sites that host directories of music, movies, games and other software. Users upload content to file-hosting sites, and then post descriptions of the material and their download links on directory sites. Uploaders are paid by the file-hosting sites based on the number of times their files are downloaded. The file-hosting sites sell premium download access to the files to the general public. The web sites that host the directory services sell advertising and do not host the files themselves. Publisher recruitment Affiliate networks that already have several advertisers typically also have a large pool of publishers. These publishers could be potentially recruited, and there is also an increased chance that publishers in the network apply to the program on their own, without the need for recruitment efforts by the advertiser.Relevant websites that attract the same target audiences as the advertiser but without competing with it are potential affiliate partners as well. Vendors or existing customers can also become recruits if doing so makes sense and does not violate any laws or regulations.Almost any website could be recruited as an affiliate publisher, but high-traffic websites are more likely interested in (for their own sake) low-risk cost per mille or medium-risk cost per click deals rather than higher-risk cost per action or revenue share deals. Locating affiliate programs There are three primary ways to locate affiliate programs for a target website:Affiliate program directories,Large affiliate networks that provide the platform for dozens or even hundreds of advertisers, andThe target website itself. (Websites that offer an affiliate program often have a link titled "affiliate program", "affiliates", "referral program", or "webmasters"—usually in the footer or "About" section of the website.)If the above locations do not yield information pertaining to affiliates, it may be the case that there exists a non-public affiliate program. Utilizing one of the common website correlation methods may provide clues about the affiliate network. The most definitive method for finding this information is to contact the website owner directly, if a contact method can be located.