Originally posted at www.ciba.org.in
Also called Performance-based marketing, affiliate marketing simply involves a merchant offering to pay a commission to a person, group or organization for generating sales leads. In the digital landscape, this would mean digital publishers (blogs or websites) that host the advertisers’ content.
Before we start, let us tell you what is affiliate marketing in very simple terms. Affiliate marketing refers to the process where you refer a product to someone online and are paid only when the person buys that product. Thus, marketers are paid only if visitors get converted to customers, and not before.
Key players involved in affiliate marketing
In a typical digital marketing sense, affiliate marketing involves the following players and process:
Merchant: Merchant is the seller of a product or service and is sometimes referred as brand or marketer, too.
Advertiser: Advertiser essentially plans and implements branding efforts. There can be two scenarios; one, where the marketer is the advertiser and interacts directly with the affiliate network to drive the marketing campaign; and second, where a merchant appoints an advertiser to perform the aforementioned activities.
Network: Network refers to a pool of publishers where advertisers can place their content.
Publisher: A publisher can be a website or blog or forum or any online content platform frequently visited by users. These individual publishers host the advertisers’ content (advertisement) and hence are the actual billboards for users.
Users: The last and the most important piece of the puzzle, users are regular people who visit numerous websites and buy products and services online.
How affiliate marketing works?
Although affiliate marketing models keep evolving to include additional intermediaries and complexity levels, any affiliate marketing campaign works on the following basic principle:
What are the various affiliate compensation models?
The terms of payment between the network and advertiser / merchant may differ in every case; however, the following methods of charging are practiced across the globe:
With increased internet penetration around the world, affiliate marketing is the way forward for all digital marketers. Equipped with a better understanding of affiliate marketing, you may now articulate a winning digital marketing strategy and take the first step towards ensuring a global reach for your brand.