Presentation on theme: " AFFILIATE MARKETING is a type of performance-based marketing in which a business rewards one or more AFFILIATES (PARTNERS) for each visitor or customer."— Presentation transcript:
AFFILIATE MARKETING is a type of performance-based marketing in which a business rewards one or more AFFILIATES (PARTNERS) for each visitor or customer brought by the affiliates's own marketing efforts. The owner of the online shop and the owner of the website sign an agreement according to which the former advertises his products on the website of the latter and gives him commission for each sold product. Affiliate marketing connects online merchants and independent websites in the role of affiliates or partners. They are so called commercial agents or sales employees for the products of certain shops.
There are 4 core players in the game: the MERCHANT (also known as RETAILER or BRAND) the NETWORK (that contains offers for the affiliate and takes care of the payment) the PUBLISHER (also known as AFFILIATE or PARTNER) the CUSTOMER
COMPENSATION METHODS Predominant compensation methods are: pay per sale (PPS) - 80% of affiliate programs cost per action (CPA) - 19% of affiliate programs cost per click (CPC) cost per mille (CPM – cost per estimated 1000 views) Cost per click and cost per mille are used by less than 1 percent of the traditional affiliate marketing programs. However, these methods are used heavily in display advertising and paid search.
MULTI- TIER PROGRAMS Some advertisers offer multi-tier programs that distribute commission into a hierarchical network. If a publisher who has signed up for the program attracts other publishers to do the same using his sign-up code, he will get additional commission (at a lower rate) when other publishers perform activities on the net. In most affiliate programs we have one-tier programs, in the minority of affiliate programs we have two-tier programs.
ADVANTAGES AND DISADVANTAGES Affiliate marketing has its advantages for the partner and the merchant. The merchant pays commission exclusively for the sold products. Affiliates are not employed by the merchant whose products or services they promote. As affiliate you can promote products of different merchants. You are given a commisssion for each sale and sometimes additional stimulus for exceeding objectives.
If you want to perform Affiliate marketing, you need AFFILIATE PROGRAM. For offering affiliate programs you don't need to register your own private company, the only condition for cooperation is your own website. Joining the established affiliate programs is mostly free, but there are also exceptions where you have to pay registration costs. As affiliate you can freely decide upon the choice and setup of advertisements and other ways of promotion. You can end the cooperation with affiliate program any time without any obligation to the merchant. The sale is registered by AFFILIATE TRACKING which is based on cookies.
LOCATING AFFILIATE PROGRAMS There are 3 primary ways of locating affiliate programs for a target website: Affiliate program DIRECTORIES large affiliate NETWORKS that have platform for hundreds of advertisers the TARGET WEBSITE itself
THE MOST FAMOUS COMPANIES USING AFFILIATE MARKETING Affiliate marketing is a very popular type of marketing used by all biggest online shops such as Amazon and eBay, it is used also in Slovenia (EnaA.com, Life.si). Links to some companies and networks that offer affiliate programs: Amazon.com - www.amazon.comwww.amazon.com Barnesandnoble.com - www.barnesandnoble.comwww.barnesandnoble.com MotherNature.com - www.mothernature.comwww.mothernature.com Priceline.com -www.priceline.comwww.priceline.com