What Is Affiliate Marketing

Guide to Affiliate Marketing

What is Affiliate Marketing?

Affiliate Marketing is where a website advertises a company’s product that they have for sale. When the advert is clicked on by a potential customer and a sale is made, the company will then reward the website owner who brought the customer to their site on a commission basis.

Who Uses it?

A Company (Merchant) that has an online website will use Affiliates (Website Owner) to assist in the advertising of their products. The business must have a transaction page I.E checkout and basket for this to work properly so the tracking solutions.

Why is it useful to an organisation?

  • You only pay for results – Affiliates work on a commission basis, so by giving them a small percentage of each sale it gives them the push to advertise your products which will help to generate more sales.
  • Widespread brand awareness -The adverts of the company products aren’t necessarily placed on similar types of websites. This in turn means that a broader audience is reached as the advert will be seen on a larger scale, which will hopefully accrue more sales.

What are the relevant Key Performance Indicators (KPI’s)?

  • The number of affiliates signed up to the program
  • The number of clicks generated
  • The sales volume
  • The average value of the orders

Are there any limitations?

  • It can be a lengthy process
  • The sector is very competitive and you need to ensure that your affiliates want to work for you over your competitors
  • You need to be careful not to attract affiliates who drive customers that would already have shopped with you

Any top tips?

  • Make sure that you choose the right traking solution
  • Make sure that your commission levels are set from the beginning
  • Make your website friendly to affiliates
  • Regularly recruit new affiliates
  • Regularly keep your affiliates updated with any new promotions/incentives, that way it’ll work better for you both.
  • Make sure that any sales and conversions are validated promptly, this way your affiliates are kept happy.

5 Key Terms used -

  • Affiliate – This is an individual who promotes the products of an advertiser on their website.
  • Affiliate Network – This is a third party technology which allows an affiliate programme to happen by supplying the technology and relations with affiliates.
  • Conversion Rate – A percentage of visitors that carry out an action that will result in the affiliate earning a commission.
  • Cookies – These are text files that are captured on a customers computer when tracking links are clicked upon. This allows for the transactions to be tracked to the right affiliate.
  • EPC (earnings per click) – this is the amount of commission the affiliate has earned divided by the number of clicks that they have sent. This is a common metric to compare affiliate programmes.
  • Merchant – This is the business that is selling products and wants help in promoting their products to gain more sales.

Useful Website -

http://performancein.com/ (previously called Affiliates4U.com or A4U)