Affili-what?

Affiliate marketing what is it?

According to wikipedia -

Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts. Examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site. The industry has four core players: the merchant (also known as ‘retailer’ or ‘brand’), the network, the publisher (also known as ‘the affiliate’), and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third parties vendors.

In reality, its a whole lot simpler than that. At its bare bones basics, affiliate marketing is about partnerships.

Partnerships that are based on CPA (cost per acquisition) i.e. sales, the merchant (i.e. client) pays the affiliate (partner website) a commission for each sale/lead/action delivered.

In this way you can pretty much interpret that affiliates are freelance commission based marketers.  Affiliates get the traffic that merchants want; merchants pay the affiliates for the sales delivered, couldn’t be simpler.

But, as with everything, the beauty is in the detail, and that’s where affiliate marketing really shines. There are many different types of affiliates, and commission can be paid based on a variety of criteria, all this, is possible because of the tracking technology that the affiliate networks provide, and through the planning and management that affiliate management provides.

From an affiliate perspective, affiliate marketing is an amazing source of residual income, my custom minifig site, for example has helped pay for holidays, iPods, iPads, iPhones (yes i am an apple geek) as well as fund an engagement ring, wedding and honeymoon. I personally don’t make a lot, but given the day job in affiliate management I’ve met a 29 year (at this time, 2010) old making £40 million a year turn over, and an 18 year old (again 2010) who just made his first £million. To be realistic, for most people, if you stick with it and treat affiliate marketing as you would any job or careers, you can expect a pretty comfortable way of life, even if you’re doing it part time. The key, is sticking with it, innovating and constantly persisting and evolving. Most affiliates start off doing this as a hobby, then making enough to go part timer before finally throwing in the day job and doing this full time. Its not easy, but its doable with the right attitude and self education.

For merchants affiliates are a massive pool of passionate entrepreneurial individuals that are able to provide huge brand advocacy and support, the more experienced affiliates will know exactly how to generate huge volumes of sales, to give you an example on one of my clients (in the baby sector, can’t say who, in 2010) made over £5million in sales from their affiliate campaign.

So, really, there’s a lot of opportunity and money to be had in affiliate marketing, but because its a 10 year old industry its still very much in its formative years and has suffered bad press and stigma, the good news is the affiliate marketing industry is maturing and there are now industry bodies and guidelines to support this on going professionalism.

If you’re still interested then keep reading this blog, you’ll find my thoughts on industry happening and advice on how to setup an affiliate site as well as manage and setup an affiliate campaign. feel free to give me a shout if you have any questions!