Effective perfomance-based marketing engaging every internet user
Affiliate marketing is a form of performance-based marketing, utilizing advancing information technology. Marketers promote products and services, that belong to separate advertisers, in return for commission.
Traditional marketing channels, such as print media and TV ads, are becoming outdated due to their costly nature and limited audience targeting capabilities. As a result, the effectiveness is sub-optimal.
Through online user data, businesses are able to precisely target their potential consumers, at a much lower cost. Affiliate marketing utilizes the growing popularity of such online marketing and targeting.
In fact, affiliate marketing is a type of performance-based marketing; businesses only pay when results are generated. In this case, businesses reward online marketers for each visitor or customer gained by their own marketing efforts.
Form a successful cycle in affiliate marketing
An advertiser is any business wishing to promote their products or services. It can be a car dealer who owns a physical dealership, or a fitness instructor promoting their intangible service. It can be a large corporation, or a micro-business of just one person. The only criterion for becoming an advertiser is that the person or business is ready to pay for the traffic generated online.
A publisher is an individual or company who promotes advertisers' products or services online. To be a successful publisher, one needs to have a pre-established online presence and a wide audience base. For example, a popular blog, a Facebook page with large number of fans, or a website. With the creatives that are offered by advertisers, publishers can promote these offers through various channels such as banner ads, email, contextual ads, and various others. Publishers earn commission on traffic they send in, in the form of leads or conversions generated for advertisers.
Consumers are the general population making purchases, either in-store or online. They are the ones who receive the advertising information online. Transactions between advertisers and publishers only occur when consumers see the ads and take an action. An action could be a click on the ads, sign up via a form, or make a purchase. The commission structure that publishers are offered depend on the type of consumer reaction that advertisers request, for example, cost-per thousand impressions (CPM), cost-per-click (CPC) or cost-per-action (CPA).