Affiliate Marketing

By Mark Sceats

A widely used form of viral marketing that can be successful is affiliate marketing. It works much like affiliate marketing in the offline world where affiliate partners are rewarded financially for putting business your way.

With online affiliate marketing web sites receive payments for actively promoting your products and services, usually in the form of commissions on sales generated by referrals. In other-words it’s a commission-based sales channel.

A prime example is the online bookstore Amazon which claims to have the largest and most successful online affiliate program. There are over 600,000 web sites actively promoting Amazon as “Amazon Associates”. If you go to the Amazon site and check out their affiliate program it will give you a good idea of how these work.

As a website owner you may decide to become an affiliate for other websites and generate income from sales made to visitors referred from your website. Some people make 6 figure incomes from doing this (of course most don't, but it certainly is possible if you pick the right products and do it well).

If you already sell services or products it may be appropriate for you to set up an affiliate program and recruit other websites to become affiliates promoting your products. Both approaches can be very worthwhile. If you are planning to implement an affiliate program here are a few things to consider:

• Ensure you only recruit partners who have reputable web sites, share similar philosophies to your own business and can be trusted. If you take a shotgun approach and accept any affiliate you can quickly have your brand undermined by cowboys using unethical marketing techniques such as spamming.
  
• Focus on having relevant partners. The benefits of affiliate marketing come about when there is a high level of associated relevance and logical fit between corresponding web sites. When there is it means that affiliate partners will be targeting the audiences you want to reach. Irrelevant partners just won’t generate appropriate leads.
  
• Ensure your goods and services are promoted in a compelling way by affiliates. Many affiliate marketers provide affiliates with appropriate promotional collateral (copy, images. web pages etc) to ensure this happens.
  
• Pick an appropriate payment structure to reward affiliates for the business they send. You may want to pay affiliates for the traffic they send your way (pay per click), however this is risky and open to abuse because it rewards people for the more traffic they send, irrespective of quality. You want targeted traffic that converts. A better approach is to instead pay a % commission based on actual business generated. That way it’s a win-win.

This page last updated May 03, 2010

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