The real step-child of online marketing is affiliate marketing, a tried and trusted method for creating sales and advertising websites or products online. Many e-commerce sites owe a great deal to affiliate marketing methods – namely Amazon.com and CDNOW’s WebBuy system. Affiliate marketing is a highly efficient way to create brand awareness and generate leads and business.
Affiliate marketing encourages ‘affiliates’ to sell or advertise a merchant’s products using a revenue share or commission system. In the early days of the web when affiliate marketing started (about late 1994) most merchants made use of a Cost-Per-Click system (known as CPC or CPM) where an affiliate made money from every click to the merchant’s website generated from the affiliate’s site. Because of bad management and many fraudsters taking advantage of this system in various ways, only about 1% of affiliate marketing is now done this way.
80% of affiliate marketing is now on a cost-per-sale basis, where the affiliate receives a commission for every actual SALE generated on the merchant’s site that is due to a referral from the affiliate – and the last 19% of affiliate marketing is on a cost-per-action basis, where the affiliate receives a revenue-share if the person referred from their site subscribes or registers with the merchant’s website.
Affiliate marketing is done through different types of techniques or publisher websites – blogs and RSS feeds becoming quite a predominant method, as well as shopping and comparison websites, loyalty websites, and others.
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