Affiliate marketing is an online advertising channel in which advertisers (online merchants that sell products or services) pay publishers (independent parties that promote the products or services of an advertiser on their Web site) only for results, such as a visitor making a purchase or filling out a form, rather than paying simply to reach a particular audience. This "pay-for-performance" model is in essence the modern version of the "finders'-fee" model, where individuals who introduce new clients to a business are compensated. The difference in the case of affiliate marketing is that advertisers only pay their publishers when the new client introduction results in a sale or a lead, making it a low-risk, high-reward environment for both parties.
(retrieved May 17, 2008 Commission Junction http://www.cj.com/about/affiliate_marketing.html)
How it Works
When a consumer clicks on a publisher's link, a cookie is set on the visitor's browser that identifies the advertiser, the publisher, and the specific link and payment rates. When the visitor makes an actual purchase online or fills out a form, that transaction is tracked and recorded. Upon recording the transaction, the affiliate programmer, like Commission Junction, handles all of the collection and processing required to ensure fair and timely commission payment for the publisher, and all of the administration and verification necessary to ensure quality sales and leads for the advertiser.
(retrieved May 17, 2008 Commission Junction http://www.cj.com/about/affiliate_marketing.html)
How to get started
The most important element of affiliate marketing is having the appropriate Web site which attracts customer based traffic. Economic success should be sustainable over time and beneficial to your customers. So, create a website which provides a legitimate service to all who view it. I would start from a reporters stand point and try to educate, or inform, my viewer. The greatest aspect of the World Wide Web is the capacity for distributing information. An informative and educational website should produce enough long term traffic to find customers for your affiliate partners and generate an encouraging income for oneself.
How to get paid
Pay-Per-Sale: An affiliate marketing program that rewards affiliates based on each conversion to a sale such as when purchasing a product or service from the merchant's web site. Pay-per-sale programs usually offer the highest commissions but tend to have the lowest conversion rates. This is the most common method of payment.
Pay-Per-Lead: Affiliate program that rewards affiliates for conversions to leads. A lead might include a signup form, software download, survey, contest or sweepstakes entry, signup for a trial, etc. Pay-per-lead generally offers midrange commissions and midrange to high conversion ratios.
Pay-Per-Click: Rewards an affiliate for each unique click to the merchant's web site. This type of affiliate program is uncommon because of click fraud or fake clicks.
Residual Earnings: Programs that pay affiliates not just for the first sale a shopper form their sites makes, but all additional sales made at the merchant's site over the life of the customer.
(retrieved May 16, 2008 Affiliate Wiz http://www.affiliatewiz.com/Affiliate-Marketing-Resources/affiliate_marketing_glossary.asp)
This Wikipedia-style artilce was created for BMKT161 at Capilano College. This was a student assignment created by Mike.
