Affiliate marketing: You only pay for results

As you all know, Internet has become an invaluable tool in today’s business world. E-commerce has gained a new foothold in the world of business and marketing. It is important to point out that allocating costs to acquiring new customers can be expensive, even in an online world where costs are much lower than the offline world.

Would it not be nice to be able to pay for your advertising only when it works? Well, this is a possibility in the online world. It is performance based marketing, and it is done through Affiliate Marketing. But what exactly is Affiliate Marketing? Let us take a look.

What is Affiliate Marketing?

Affiliate Marketing is a type of marketing that relies on performance and you, as a merchant, only pay when your advertisement performs well.

Traditionally, the Internet has allowed merchants to be able to advertise on certain spaces on the web. This could come in the form of banner ads within certain websites or email messages. It might also include investing in ads like buying space at the top of search inquiries for popular search engines like Google or Yahoo!.

The problem with buying space like this is that you, as a merchant, are required to pay a flat fee for something like a banner ad to be placed on a website. This poses a problem for one main reason. The biggest and most common problem is that your initial payment for advertising is a bit of a gamble, especially if the site that allows you to advertise is new to you. You might not know how much traffic the advertisement will produce at first.

Affiliate marketing: A referral based marketing strategy

And let’s say it does not work out very well. The advertisement did not quite meet expectations and it resulted in very little traffic to the site and fewer actions taken by prospective clients. At this point, you’ve sunk more money into the advertisement than what you may have gained back. It is a win-lose situation because the website owner earned money and you, the merchant, lost money.

All hope is not lost, however. With affiliate marketing, the exposure that you get stays intact just as it would for advertising through something like a banner ad. The difference, however, is that instead of paying the affiliate upfront, you only pay the affiliate once some kind of action has been taken, whether through a click or filling out an online form. You could think of this type of payment as a commission for the affiliate. After all, affiliate marketing is a referral based marketing strategy, and any increase in traffic means more money for the affiliate. In this way, it makes sense for an affiliate to promote their merchant; they have an incentive.

Would you like to learn more about affiliate marketing? You can delve deeper into this topic by reading “Affiliate Marketing” written by the Internet Marketing Academy.

Download this Affiliate Marketing eBook right here