At Home Data Entry - Affiliate Marketing 101

Are a simple way for Web sites to generate revenue by directing traffic toward other sites and a great way for the operating site to increase its traffic and revenue, also known as Associate Programs or Partner Programs, "affiliate programs", invented by CDNow.com at the end of 1994 and pioneered by Amazon.com in 1996.

They have become the industry's dominant method of online Marketing, because affiliate programs are so convenient and work so well.

Pay-Per-Lead and Pay-Per-Sale, pay-Per-Click, there are 4 different kinds of affiliate programs to compensate "Affiliates" (or referring sites) for generating traffic to the Affiliate Program operating Website: Pay-Per-Impression.

But were mostly abandoned due to Fraud and lack of Results, they were used in the Past. Pay-Per-Impression (CPM)The Pay-Per-Impression and Pay-Per-Click Model are not common to be used in Affiliate Marketing anymore.

The feature is called "Site-Targeting" in AdWords and allows you to display your Adsense Ad on a specific Website that runs AdSense Ads. The CPM (cost-per-impression) compensation Model was revived by Google for Google AdWords in summer 2005.

Pay-Per-Click (CPC) Model

Like the Pay-per-Impression model was the Pay-Per-Click (PPC) Model popular during the dot com boom at the end of the 1990th but was mostly abandoned by Advertisers for Advertisements on other Websites due to rampart problems with click fraud.

And renamed from "Yahoo Sponsored Search" to Yahoo Search Marketing. The PPC Model was kept alive by the PPC Search Engine GoTo.com which became later Overture.com and is now owned by Yahoo!

Other PPC Services are Miva/FindWhat.com and 7Search.com. Now simply Ask.com followed with their PPC Service in 2005 called Ask Sponsored Listings and MSN.com in 2006 with AdCenter, ask Jeeves. Google launched their PPC Service AdWords in 2000.

Contextual Advertising

Here is a quote from Google's History at Google's corporate Website. What is Google AdSense? The birth of contextual Advertising, the big come-back of PPC came when Google launched AdSense in 2003.

" Increasing the usefulness of the page and the likelihood that those viewing it will actually click on the advertising presented there, google AdSense technology analyzes the text on any given page and delivers ads that are appropriate and relevant. Offering web sites of all sizes a way to easily generate revenue through placement of highly targeted ads adjacent to their content. . . Google AdSense: ".

Microsoft is also working on their own Version of AdSense which is expected to be launched (beta) in 2006. Publisher Network was launched (beta) in 2005. Yahoo's Version of AdSense called Yahoo!

Search Engine Marketing (SEM)

It is an entirely different type of Internet Marketing and only has some technical details in common with old PPC/CPC Affiliate Marketing. Classic PPC Search Engine Marketing (Cost-Per-Click (CPC) advertising) is not Affiliate Marketing.

Contextual Advertising introduced with Google AdSense is also not Affiliate Marketing since no direct Partnership between the Advertiser who creates and pays for the Ads and the Publisher who displays the Ads on his Website. Search Results, free, ads are primarily displayed at the Search Engine Search Results Pages (SERPs) next to organic.

SERPs at major Search Engines via technical means and deep understanding of the complicated ranking algorithms used by modern Search Engines, free, this type of Marketing is generally referred to as Search Engine Marketing (SEM) and is often and wrongly mixed up and confused with Search Engine Optimization (SEO) which is about improving the ranking of a Site in the organic.

Search Engine Marketing and Search Engine Optimization within the next years, it is expected to become the 4th major type of Internet Marketing next to Affiliate Marketing. Pay-Per-Call Advertising is still new and in it's infancy. Recently developed call-tracking technology allows to create a bridge between online and offline Advertising. Pay-Per-Call Advertising is neither Search Engine Marketing (SEM) nor Affiliate Marketing.

The paid commission is usually a percentage of the referred sales or a flat dollar amount. The Affiliate Marketing shifted almost entirely to the Pay-Per-Lead (CPA or CPL) and Pay-Per-Sale Model (CPS) which is also known as Performance Marketing.

The Pay-Per-Lead (CPA or CPL) Model

Signing up for a Newsletter or Creating an Account, it could be Actions like filling out a Form. The Advertiser pays Affiliates a Flat Amount Commission if a referred visitor performs a specific action on the Advertisers Site.

Due to the usual high flat commission amount is the CPA very attractive for PPC Affiliates that do not have a permanent Website and an established User Base. DVD and Video Game Rental Services and Loans and Mortgages, insurance Services, the CPA Model is very popular with Online Services like Credit Card Providers.

Affiliates that generate tons of "fake" leads if you do not have anything in place to verify the quality of the produced leads, your program will be vulnerable to become a victim of fraud. Make sure to have mechanisms in place to validate the quality of referred leads, before you consider the CPA Model for you problem.

The Pay-Per-Sale (CPS) Model

The Merchant pays a percentage of the Order Amount that was created by a customer who was referred by an Affiliate. This Model is used by most Online Merchants today.

But you will also pay commissions for returning customers, you will gain new customers because of the Affiliate Program. Do not pay commissions that you end up loosing money on an order.

See the Affiliate Program also as a Customer Retention Tool. Are often visited by Shoppers first, that make up a large percentage of successful affiliates, cash-Back Shopping and Charity Sites, coupon Sites, comparison Shopping Sites. Shoppers on the internet are more savvy today.

CPA or CPS?

Because the lag of an affiliate program for your site, that you are loosing a considerable amount of business to them, chances are good, if your competitors have affiliate programs and you don't.

The next Merchant that has a Program is only one click away, affiliates are not waiting for you. Do the math to come up with a Flat Commission that makes it worthwhile for affiliates to promote you. Consider the CPA Model and pay a flat commission for new customers referrer by affiliates, if you want to use an Affiliate Program as an Online Merchant for the whole purpose of customer acquisition.

The best thing to do is always to check first what your competitors are doing and use their compensation model as reference. You can also mix compensation models. What you do and what commission you pay is up to you.

Banner Impressions), ) and not just for promises (Clickthroughs. Sign-up etc, the operating Site only pays "Commission" to their Affiliates for actual Results (a Sale. 2/3 to 3/4 of all Affiliate Programs today are Pay-per-Sale Programs. Pay-Per-Sale is by far the most common compensation model.

Affiliate Networks

Those Services provide the infrastructure for you to track all the traffic and referrals to your Website. Most Sites utilize 3rd Party Services (so called Affiliate Networks). Operating an affiliate program to drive traffic to your website has never been easier.

The Integration of their Service usually takes just a few days or sometimes just a few hours. Networks also work as a Recruiting Platform to find Websites willing to promote your Products or Services.

Some of the Networks also help you to keep the generated overhead low (such as Payment of the Affiliates).

You must pay $12.5 in commission and fee for a $100 Sale, if the Fee is 25% for example and you pay 10% commission per Sale to you Affiliate. Networks usually charge 20-30% of the commission you pay to Affiliates as Fee to you.

In-House Affiliate Program Solutions and Software

You might want to have more control over your Affiliate Program and avoid the Network fees by running the program In-House.

But that is may be not very cost effective and not as easy as it seems, develop all the necessary tools and technology by yourself, of course, you can.

The technology has already been developed by various Affiliate Tracking Solution Providers and Software Packages.

Be carefull with too small or too new Solution and Software Provoiders. They are most of the time easy to plug into your existing Sites and have already proven themselves.

Do your diligence! Check the Background of the Company you consider first.

Outsourcing - Outsourced Program Management (OPM)

Now begins the complicated part starts. The first and important step was done, when you have your Program up and running.

Business on the internet matured and Affiliate Marketing as well. The Wild West of Affiliate Marketing when quick and easy money was made and having an Affiliate Program running on "Auto Drive" generated a huge increase in sales by affiliates that seeked out programs and did everything themselves without the need of support and guidance is over.

Must be worked out and be enforced, the Affiliate Agreement, a clear set of Rules. Support of existing affiliates also became vital. To get active and quality affiliates requires active recruitment efforts. An Affiliate Program requires attention.

Allocate Resources to the program and don't do it on the side.

Your program is destined to fail if you don't spend the required resources and time for your program.

There are today a number of quality service companies available that are specialized in this. Consider outsourcing of your program management (OPM), if you don't have the resources in-house.

Conclusion

That Affiliate Marketing is the most cost effective and efficient way to promote your products and services on the World Wide Web, prove, thousands of Websites operating their Affiliate Program successfully today.

Affiliate Marketing guarantees a fast ROI (Return of Investment) and for some Online Merchants and Services are the Sales generated through the Affiliate Channel making up a considerable percentage of their total online Revenue.

Important Abbreviations

CPA - Cost per Action

CPC - Cost per Click

CPL - Cost per Lead

CPM - Cost per (Mil) Impression (1000 Impressions)

CPS - Cost per Sale

CR - Conversion Rate

CTR - Click through rate

It has nothing to do with DRM as in Digital Rights Management Technology), dRM - Dynamic Rich Media (type of Ad.

EPC - Earnings per Click / Earnings per 100 Clicks

OPM - Outsourced (Affiliate) Program Management

PPC - Pay per Click

ROI - Return of Investment

SE - Search Engines

SEM - Search Engine Marketing

SEO - Search Engine Optimization

SERP - Search Engine Result Page

SID - URL Parameter the Affiliate can pass to get tracked with Sales and Leads

Abbreviations of Websites you will come across

ABW - ABestWeb - Affiliate Marketing Forum

CJ - Commission Junction - Affiliate Network

LS - Linkshare - Affiliate Network

MyAP - My Affiliate Program - In-House Program Solution

PF - Performics - Affiliate Netwok

SAS - ShareASale - Affiliate Network

SEW - Search Engine Watch - News and Resources

SR - Share Results - Affiliate Network

TW - Thread Watch - Internet Marketing News Discussions

WW - Webmaster World Forums