By: Mr Hashem Alaidaros MKT 445 Lecture 3 Title: Affiliate Marketing

Main points Affiliate Marketing How it works How do affiliates promote merchants Different types of commissions Affiliate tracking - Cookie Affiliate Network

What is Affiliate Marketing? 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.

How it works 1. An affiliate refers potential customers to a merchant's website 2. Some of those customers performs a desired action 3. The merchant rewards the affiliate for each desired action resulting from the affiliate’s referral

How do affiliates promote merchants? The basic aim of an affiliate is to send targeted traffic (that means customers who are very likely to perform the desired action) to a particular merchant’s web site. Affiliates may promote as many merchants in as many industries with as many tactics as they wish, but usually affiliates will start to specialize.

Cont. Affiliates use a number of means to promote merchants. These include: Personal web sites, Content and niche sites, lists, Loyalty sites (points or cash back or charitable donations), Coupon and promotions sites, Comparison shopping (see also PPC advertising), and Search affiliates (search arbitrage)

Different type of Commissions There are different types of commission, based on the merchant’s industry: CPA: Cost per Action. Paid when a certain action is performed by a user. Revenue Share: Commission structure where the affiliate earns a percentage of a sale. CPC: Cost per Click. Paid when a link is clicked upon.

Tracking The most essential element to affiliate marketing is tracking. Tracking software places a cookie on a user’s browser when that user clicks on an affiliate link. Affiliate tracking software collects information even if no action is completed. This is vital to the affiliates and to the merchants to see where they can optimize their campaign. Information collected includes: Impressions Clicks Conversions

Cookies A cookie is a small text file that is sent to your computer via your web browser when you visit some websites. These cookies are used to store information about you for the next time you visit that site - information like where you went on the site and what you did. Cookie files are a great way for a website to remember you when you next visit, but if you want to surf the net without worrying about your privacy or security being threatened, you might want to stop them being sent.

Cookies What they do? Cookies have a variety of different functions: remembering purchasing information recording your viewing preferences storing scores for online quizzes. All of which can be useful if you repeatedly visit the same sites time and again. A cookie from a particular website will sit on the hard drive of your computer and wait until the next time you visit that site.

Affiliate Networks As well as the affiliate and the merchant, there is a generally a very important third party in the affiliate marketing mix – the affiliate network. - Affiliate networks are often used as an intermediary between affiliates and merchants. Affiliate networks provide tracking solutions, reporting and support to both affiliates and merchants.

Affiliate Networks