Marketing Services

What Is An Affiliate Marketing Program?

Affiliate marketing is a process in which you promote a product or service made by another company. When your efforts result in a sale (or other desired action) you receive a payment from that company. While the desired result is usually a sale you can also receive a fee for other actions such as a lead, signups for a free trial, clicks to a website or downloading an app, among others.

Affiliate marketing is an effective way of selling because a company can enlist a large number of marketers to sell their product by offering them a cut of their profits and thereby increase their sales. The affiliate marketer benefits because they do not need to own the product or service but simply promote it in order to profit.

Affiliate marketing has become highly popular and it is estimated that the market will be worth over $8 billion by 2022 and there are a large number of affiliate marketing programs available for you to choose from. These have varying conditions and payout terms but the most important thing to consider is whether the product or service you intend to promote is aligned with your audience or the audience you want to target.

There are various affiliate marketing programs which mostly fall into one of the following types based on how they reward the marketer:

• Pay-per-sale – this is the most well known arrangement in which a merchant pays the marketer when they send them a customer that makes a purchase; this is typically a percentage of the purchase price.

• Pay-per-click – in this case the merchant pays the affiliate based on the number of users that click on a link to visit the merchant’s site; in this case no purchase need be made and a fixed amount is paid for each visitor no matter what they do on the merchant’s site afterwards.

• Pay-per-lead – this type of affiliate program pays out for visitors who become ‘leads’ for a product or service. This generally means that they are interested in a product or service but a sale does not have to occur; usually there is a requirement that they provide further information about themselves that will be used for further marketing efforts.

While affiliate marketing programs are simple in concept, they must be carefully structured to work properly. For affiliates to be paid accurately the activity they generate for the merchant must be carefully assessed. The arrangement between the affiliate and the merchant regarding payment also involves an element of trust. When choosing an affiliate marketing program make sure that it suits your audience, that it is established by a reputable merchant and that you are clear about payment terms and conditions.

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