Affiliate marketing is a method of promoting web businesses in which an affiliate is rewarded for every visitor, subscriber, customer, and/or sale provided through his/her efforts. It is a modern variation of the practice of paying a finder's fee for the introduction of new clients to a business. Compensation may be made based on a certain value for each visit (Pay per click), registrant (Pay per lead), or a commission for each customer or sale (Pay per sale), or any combination.
Merchants like affiliate marketing because it is a "pay for performance model", meaning the merchant does not incur a marketing expense unless results are realized.
Some e-commerce sites run their own affiliate programs while other e-commerce vendors use third party services provided by intermediaries to track traffic or sales that are referred from affiliates. Some businesses owe much of their growth and success to this marketing technique, although research has shown in general the increase to be approximately 15-20% of online revenue.[citation needed]
Merchants who are considering adding an affiliate strategy to their online sales channel have different technological solutions available to them. Some types of affiliate management solutions include: standalone software, hosted services, shopping carts with affiliate features, and third party affiliate networks.
Revenue generated online grew quickly. The e-commerce website, viewed as a marketing toy in the early days of the web, became an integrated part of the overall business plan and in some cases grew to a bigger business than the existing offline business. Many companies hired outside affiliate management companies to manage the affiliate program (see outsourced program management.)
Affiliate marketing can be a tough and challenging online business - Being successful in affiliate marketing isn't as easy as rolling out of bed, regardless of what any company says. It's not just a case of putting up few links and banners and waiting for the money to roll in. Whether an affiliate or merchant, it takes effort, passion and commitment to make the most from revenue share programs.. We know, we've been there.
Even if you do your marketing correctly, your site does generate a lot of traffic and you refer thousands of visitors to your merchants, there are many traps and pitfalls that can see you losing your commissions.
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