Define Affiliate Marketing

This will be touched upon in our print wholesale/dropship booklet further..

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.
The advertisers/merchants are typically referred to as affiliate merchants and the publishers/salespeople are referred to as affiliates.

Benefits of affiliate marketing include the potential for automating much of the advertising process (accepting & approving applications, generating unique sales links, tracking & reporting of results) and payment only for desired results (sales, registrations, clicks).

Paying only for performance shifts much of the advertising risk from the merchants to the affiliates, although merchants still assume some risk of fraud from partner sites.

Affiliate marketing has contributed to the rise of many leading online companies., one of the first significant adopters, now has hundreds of thousands of affiliate relationships. It is not uncommon to see industries where the major players have affiliate programs–often structured in a similar manner and making similar competitive changes over time.
affiliate merchant

The advertiser in an affiliate marketing relationship.
The affiliate merchant is responsible for implementing a sales tracking system, providing a selection of linking methods, attracting affiliates, monitoring results, increasing results, and paying affiliates. Some (or all) of these functions may be outsourced.

Affiliate merchants may track their program in-house using an affiliate software program or through a 3rd-party affiliate network. Actual day-to-day management of the program can similarly be kept in-house or outsourced.

affiliate network

A value-added intermediary providing services, including aggregation, for affiliate merchants and affiliates.
For affiliate merchants, services can include providing tracking technology, reporting tools, payment processing, and access to a large base of affiliates.
For affiliates, services can include providing one-click application to new merchants, reporting tools, and payment aggregation.

affiliate fraud

Bogus activity generated by an affiliate in an attempt to generate illegitimate, unearned revenue.
Fradulent activity by affiliates comes in both automated and non-automated varieties. Automated scripts attempt to mimic the activity of legitimate, human visitors. Non-automated schemes may involve coordinated efforts by humans actively generating excess clicks or registrations.
After the fact, affiliate fraud can sometimes be spotted by checking activity logs for unusual patterns. Proactive protection may involve manually approving affiliate applications, although this minimization of fraud must be balanced against the risk of losing legitimate, productive affiliates who don’t want to wait for approval.

affiliate directory

A categorized listing of affiliate programs.
Affiliate directories are a popular starting point for finding and comparing various merchant’s programs. The individual networks also provide aggregated information for their programs, but lack the all-in-one overview of the directories.
Many of the directories provide simple text listings, but a few offer more advanced search capabilities. Other semi-common features include articles, newsletters, and forums. A few of the biggest sites could rightfully be called affiliate portals.
There are countless affiliate directories, but only a few differentiate themselves from the rest. Be careful of directories that are only interested in hyping programs that make a quick buck for the directory, but offer nothing of lasting value for your site. A good directory helps you find the programs that are best for your site and your visitors.

return days

The number of days an affiliate can earn commission on a conversion (sale or lead) by a referred visitor.
If an affiliate program offers 45 return days, commissions are earned for conversions completed any time within 45 days of the initial click-through on the affiliate link. The visitor may later go directly to the merchant’s site and not visit the affiliate’s site again, as software is used to track the visitor’s origin.
If an affiliate program offers zero return days, commissions will only be earned for conversions completed on the initial visit following a click-through. Once the visitor leaves the destination site, the commission opportunity is lost, even if the visitor returns in a few minutes to complete a transaction.
Affiliate programs vary as to which affiliate gets credit for a sale when a visitor has followed more than one affiliate links prior to the sale; some programs favor the first affiliate, some programs favor the last affiliate.


4 Responses

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