We often talk about affiliate marketing here, but not everyone may know what it is. Today, we are going to explain how affiliate marketing works.
Affiliate marketing appeared early on the internet and the idea is pretty simple. It is about getting help from webmasters in order to reach out to audiences with your product or service, and paying for that help in some way. A common example is airlines paying for each booking that you generate through your online travel guide.
Payment Models in Affiliate Marketing
There are a number of different models for how an affiliate gets paid. Payment is always based on performance in some way and the following payment models are available:
Pay per sale
Pay per lead
Pay per click
Paid per ad view
Today, there are a number of networks for affiliate marketing and their function is to connect advertisers with potential affiliates. For this, they charge a percentage of the payments and some also charge initiation fees as well as fixed fees. Some examples of affiliate networks:
Affiliate Marketing and Search Engine Optimization
Affiliate marketing and search engine optimization go hand in hand. Sellers of products and services often fail in search engine optimization, something which affiliates tend to be very good at. Basically, all successful affiliates work with search engine optimization in one way or another, even those that are now major brands. However, sometimes this creates problems for those who have chosen to advertise with affiliate marketing, because the affiliate can become something of a parasite instead of a profitable source of customers. By capturing those who actually searched for your brand or your product, they can easily convert the visitors to customers (after all, those visitors had already decided to buy from you) and thus eat into your margins.