Understand A.M. aka Affiliate Marketing

At its most basic Affiliate Marketing is simply the establishment of a relationship between two or more website owners for their mutual financial benefit.

The majority of websites are established to promote products or a service of some kind, yet they are little use if no-one knows about their existence. A website operator may decide to leave the generation of visitor traffic to his site to the various search engines. However, most search engines work by simply taking account of the number of other sites linking to yours as a measure of your popularity. Affiliate Marketing is a way to take advantage of this fact to generate revenue, not only for you through your own site, but also for those sites that point visitors in your direction.

For most of the 20th Century, the traditional sales and marketing model was predicated on spreading your message as far and wide as possible. Traditionally, this was done through media advertising, direct marketing to potential customers and the use of sales teams, both direct and indirect. In many ways, Affiliate Marketing takes this model and applies it to the Internet - with one crucial difference. In traditional marketing, the message is spread hoping that it will reach prospective customers - an outward-bound style of marketing; with Affiliate Marketing, the potential customers are drawn towards the product information - an inward-bound marketing model that is far more effective.

In the early days of the World Wide Web, the message was spread through mutual link exchanges. A simple mechanism where one website would exchange a link with another on the basis of “I’ll tell my visitors about your website, if you tell yours about mine.” However this was little more than a “hand-shake” type arrangement with no incentive for links to be promoted and no financial benefits attached.

Affiliate Marketing takes that concept and expands it.

Assume that you are a store selling a popular commodity item such as books. While you want people to come to your bookstore, it would also be a good revenue generator if people purchased books through your website, saving you overhead and enabling you to order books from the distributors as they are purchased, cutting inventory and reducing risk. So how do you get people to come to your website to buy the books they are interested in?

Offer to pay anyone who sends a visitor from their website to yours a small percentage of any resulting sales.

The owners of that website now have both a benefit from the link and an incentive to promote your store. You can almost guarantee that your link will go from being buried on the “Links” page to being on the front page of their site. They will also spread the word among people of the same interests, and before long you have more people supplying revenue generating links to your site. The link exchange has now become “Look at this cool site and these cool products – Go visit it.”

Now you have an Affiliate Marketing program in place.

So one simple definition of an affiliate marketing program is that a producer (X) establishes a relationship with another website owner or publisher (Y) wherein he provides a financial benefit for Y to direct visitors to X’s website.

Of course, the more associate publishers that content producer signs up, the broader his reach and the more revenue will be generated.

Courtesy of StartLogic.com
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