Firstly, know that this article is not a comprehensive “welcome to affiliate marketing” guide. I will not spend much time going over the basics, but will spotlight the actual methods you need to make money – with a bit of pertinent background to help you understand the reasons behind these methods. You beginners will find this information invaluable and stimulating. You practiced marketers will find this information accurate and refreshing, while also discovering some astonishing new ideas to employ in your everyday endeavors. So, let’s continue.
Almost everyone that makes money on the internet (even the millionaires) do so through affiliate marketing. Affiliate marketing is a means of promoting web businesses in which an affiliate is rewarded for every visitor, subscriber, customer, and/or sale provided through his/her efforts. Compensation or commission may be made based on a certain value for each Impression (CPM), click (Pay-per- click), registrant or new customer (Pay-per-lead) or (Cost-per-Acquisition / CPA), sale (usually a percentage, Pay per sale or revenue share), or any combination of them.
In very short English; there are literally hundreds of thousands of affiliate programs on the web featuring tens of millions of products ranging from magazine subscriptions to life insurance and every conceivable thing in between. An affiliate is essentially a salesperson whose job is to send people to a merchant’s website. When a predetermined “action” or sale is made, the affiliate is paid a commission. It’s the same as being a salesperson in retail, only online. I will teach you more about the actual application of affiliate marketing later in this chapter.
Another important attribute of an affiliate program is its’ compensation model. This may have an impact on which advertisers you decide to join and how you go about promoting them. It will surely have an impact on how much money you will make. Here is a breakdown of the various compensation models that affiliate advertisers utilize.
Pay-per-impression (PPI) / Cost-per-thousand (CPM)
Cost-per-mil (mil/mille/M = Latin/Roman numeral for thousand) impressions. Publisher gets from Advertiser $x.xx amount of money for every 1000 impressions (page views/displays) of the ad. The Ad can be text , rich media, but in most cases, the ad is a banner running across the top, or down the side of a website.
Pay-per-click (PPC) / Cost-per-click (CPC)
Cost-per-click. Advertiser pays publisher $X.XX amount of money, every time a visitor (potential prospect) clicks on the advertiser’s ad; it is irrelevant (for the compensation) how often an Ad is displayed. Commission is only due when the Ad is clicked. The PPC model is used by Google AdWords, Miva and other providers. These are the ads that you see running along-side search results and many web-pages out there.
Pay-per-lead (PPL) / Cost-per-action/acquisition (CPA) / Cost-per-lead CPL)
Cost-per-action (CPA). Cost-per-Lead (CPL). Advertiser pays publisher $X.XX in commission for every visitor that was referred by the publisher to the advertiser (web site) and performs a desired action, such as filling out a form, creating an account or signing up for a newsletter. This compensation model is very popular with online services from internet service providers, cell phone providers, banks (loans, mortgages, credit cards) and subscription services.
Pay-per-sale (PPS) / Cost-per-sale (CPS)
Cost-per-sale (CPS). Advertiser pays the publisher a percentage (%) of the order amount (sale) that was created by a customer who was referred by the publisher. This model is by far the most common compensation model used by online retailers that have an affiliate program. This form of compensation is also referred to as Revenue sharing.
Pay-per-call (no abbreviation exists yet)
This is a new compensation model. No official abbreviation exists yet. Advertiser pays publisher a $X.XX commission for phone calls received from potential prospects as response to a specific publishers’ ad. Recently developed call-tracking technology allows to create a bridge between online and offline advertising. Pay-per-call advertising is still new and in its infancy.
Choosing a Model:
As you can see, there are advantages and disadvantages to the various compensation models. This can (and should) be decisive in your selection of which affiliate program to join, but depends largely on what you are promoting and how you decide to go about promoting it. For example, the paid surveys program Survey Adventure, pays out an extremely high $4.50 per double opt-in lead (CPA). The action; signing up with the company is free, so obviously, the program converts very well, but you must provide many leads in order to make a substantial amount of money. The real money is in pay per sale programs (PPS). If you have a good product and a sound marketing plan, the money will come.
Affiliate Marketing & You
There are many other aspects, facts, advice and information that I could share with you on the subject of affiliate marketing, but we don’t want to get too far into it. So I will briefly cover a couple of subjects quickly that apply to what I feel you will actually need to know and what you will be employing in your money-making endeavors.
The rise of blogging, interactive online communities, article directories, simple web sites and other new technologies and are forming the new Web 2.0. These new technologies have impacted the affiliate marketing world in a very big way. Creating a presence online used to take months as well as a number of trained professionals. Nowadays, it is quite possible for newcomers to (by themselves) “set up shop” literally overnight and with very little experience. Also, this new media allows merchants to get closer to their affiliates and improved communication between each other. What this means to you, is that you can be on your way to becoming a super affiliate master as soon as you finish this guide!
Trademark Bidding / SEO
Affiliates were among the earliest to adopt Pay-per-click advertising when the first PPC search engines. In 2000 Google launched their PPC service AdWords which is responsible for the wide spread use and acceptance of PPC as an advertising channel. Since then, a large number of advertisers have adjusted their affiliate program terms to prohibit their affiliates from bidding on those types of keywords. Though we will not go into PPC Marketing, you must understand that some trademarks, such as the term “eBay” are heavily restricted because of this.
One area that has not been hit by new restrictions is SEO or “Search Engine Optimization”. Later, I will be teaching you how to create profiles that will trick Google and other search engines into indexing them as relevant websites and list them in top search results. Sign up for AdWords and Miva. I will show how to use these later in the guide.
Why Affiliate Marketing
Affiliate Marketing is driven by entrepreneurs who are working at the forefront of internet marketing. Affiliates are the first to take advantage of new emerging trends and technologies where established advertisers do not dare to be active. Affiliates take risks and “trial and error” is probably the best way to describe how affiliate marketers are operating. This is also one of the reasons why most affiliates fail and give up before they “make it” and become “super affiliates” who generate $10,000 and more in commission (not sales) per month.
You will not earn the right to call yourself an affiliate marketer overnight. You will have to work (relatively) hard and innovatively to make the kind of money that you want, but know that if you do, the rewards are very large and there for your taking. Never give up!
Very few publishers handle their affiliate programs in house. Most affiliate programs are set up and managed by large affiliate networks. Most of my affiliate programs are set up and maintained by the affiliate network ClickBank, which is the largest affiliate network on the web. Some networks do not have qualification criteria, but most do.
The majority of this online guide will focus on marketing strategies for ClickBank affiliates, but here is a short list of the top affiliate networks that all of the professionals belong to and you should apply to.
The “Big 4” Affiliate Networks
ClickBank connects over a hundred thousand affiliates with thousands of information product vendors offering a huge array of downloadable products, mainly eBooks. Because it is cheap and easy for merchants to join, the quality of the products provided can vary. ClickBank is also a great place to search for unexploited niches.
Commission Junction (or “CJ”) is another very popular affiliate network. CJ brings together affiliates and product vendors, but also offers physical products for its affiliates to promote. CJ has many large brand names on its site, and is very well established. It is free to sign up, but most vendors are selective of who represents them.
LinkShare features more than 600 merchants. You’ll find mostly big name and well established companies, such as Wal-Mart, Foot Locker, and Apple iTunes. Merchants are selective in representation!
Performics is a highly professional site with very well known brands. Performics’ clients include: Orchard Bank, Office Max, Activa Sports, Barnes&Noble, Fossil, and more than 200 other big name, big business advertisers. Performics is owned by DoubleClick. Armatures need not apply, but may try.