Affiliate Programs: The Pros and Cons

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Dec 26, 2017
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Unknown to many, most advert pop ups during internet streaming or browsing are marketing strategies used by affiliate programmers. Another name for a affiliate program is affiliate model. Affiliate program is an automated electronic program that involves a web advertiser and recruited webmasters. The webmasters (affiliates) place the company’s advertisements on heir individually owned websites. Affiliate programmers are members of a group of associated networks. Online businesses reward one or more affiliates for each visitor or customer brought by affiliate’s marketing efforts. Four core players are involved in the industry they are: Merchants (retailer/brand), The Network (contains offers for affiliates to choose from and takes care of payments), the Publisher (affiliate) and the customer.
Affiliate marketers use regular advertising methods e.g. Search engines use regular advertising methods such as Search engine Optimization (SEO) paid search engine marketing (PPC-Pay per click) email marketing, content marketing and display marketing. Sometimes they use less orthodox techniques i.e. product review publishing. Affiliate marketing relies on financial motivation to drive sales unlike referral marketing which relies on trust and personal relationships. The ads in affiliate programs are linked to company websites and are known as affiliate links.
Affiliates have to apply for the affiliate programs of which majority cost nothing to join. An online visitor is redirected to the advertiser’s website when he/she clicks the affiliate link, if the customer or visitor then makes a purchase, the affiliate gets a commission. Affiliates decide within their programs which banners or ads should be placed on their websites. This decision is based on their individual calculations of which company’s ads their web visitors re most likely o be interested in. They also agree based on which merchants have the best commission structure, although most structures is usually not very high-paying or profitable.Affiliate tracking is the process of managing and tracking marketing activities usually through the use of a special software and different plug-ins installed in affiliate websites.

Origin:
Translation of revenue share principles to mainstream e-commerce happened in November 1994 almost four years after the origination of World Wide Web. The concept was patented by William J. Tobin founder of PC Flowers and gifts. Cybererotica was among the early innovators with a cost per click program. Amazon.com launched its in July 1996 where online purchases made by visitors on the site generated a commission for associates hence, becoming the first widely known program and a model to subsequent.

Development:
Affiliate marketing has grown since its birth. According to one report, total sales amount in 2006 was £2.16billion in the United Kingdom alone. Estimates yielded £1.35billion sales in2005. The most active sectors for affiliate marketing in 2006 were adult gambling, retail industries and file sharing services.

Web 2.0
Web 2.0 consists (blogging and interactive online communities) have improved the affiliate marketing world as well. They allow improved communication between merchants and affiliates through personal bloggers, writers and independent website owners. Bloggers are people who blog and a blog is a website that allows users to reflect, share opinions and discuss various topics inform of an online journal sometimes letting readers comment on their posts. Most blogs are written in a slightly informal tone (personal journals, news, businesses, etc the entries in blogs appear in reverse chronological order. www.blackhatnaija.com is an example of a blog

Compensation method:
Eighty percent affiliate programs use revenue sharing or pay per sale as means of compensating affiliates, nineteen percent use cost per action and others use cost per click or cost per mille (i.e. per 1000 views). Cost per mille requires the publisher to make advertising available on his/her website and display it to its visitors in order to receive commission. Pay per click requires not only the visitor’s awareness but also the clicking on advertisements to visit advertiser’s website.

Merchant’s advantage:
Affiliate marketing is preferred by merchants because it mostly uses pay per performance model which does not incur any marketing expense (excluding initial setup cost)
Publisher recruitment:
Almost any website could be recruited as an affiliate publisher but high I traffic websites are more likely interested in low-risk or medium-risk cost per click rather than higher-risk cost per action or revenue share deals.

Affiliate programs’ location:
Programs for a target website could be located trough
Affiliate program directories
Large networks providing hundreds of advertisers for the program
Target web itself.

Threat to affiliate programs:
Although many affiliate programs have terms of service containing rules against spam, it is widely known to attract abuse from spammers. Abuse take various forms the most common ones being email spam, malicious browser extensions, search engine spam and adware
 
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