Affiliate Marketing Basics – Part 1

affiliate marketing transactionThe sales process in Affiliate Marketing is pretty straightforward. A visitor goes to an affiliate site and clicks on a link that takes them to a merchant site. If the visitor buys something or performs some defined action then the merchant pays the affiliate a fee or commission. It’s really that simple.

The details of the process are a bit more complicated.

  • What types of links should you use?
  • Which works better banners or text links?
  • Where on the merchant site should you send your prospect?
  • How do you put your visitors into a buying mood?

You have many types of links to choose from… text links, banners, product links, coupons, and dynamic media. The success rate, or conversion, for each type of link will differ depending on the site visitors preferences or predisposition to buy and the context in which it is presented.

Where the link takes someone on the merchant site, or landing page, is also a major factor in the conversion rate of that click. If the visitor is just beginning the sales cycle more than likely they will need to get familiar with the merchant and become comfortable with their value proposition before they will be ready to buy. If the visitor is ready to buy or has been sufficiently presold by the affiliate it makes sense to send that visitor very close to the shopping cart, probably directly to a product detail page.

The point is, the affiliate and the merchant are partners in a selling process and it makes sense to have the team work together in synchronicity to achieve their mutual goal. This is where the details of the affiliate marketing process will lead to success or failure for both affiliate and merchant.

Different Types of Affiliates/Strategies

Affiliate Sites come in all flavors depending on the experience and interests of that affiliate. Each type will present a merchant in a different way and use marketing techniques that are unique to their approach. Here’s some of the most common types…

Content Affiliate

This affiliate bases their site around a theme or niche that they are familiar with or perhaps even passionate about. They typically write content around the subject matter, provide product reviews based on their own experiences, and generally add value for the consumer by being a bit of an expert in their field. Some content affiliates research their niche thoroughly until they are experts. Links that work best for this type of affiliate are in-context text links that are built into the flow of their content.

Search Engine spiders tend to love these sites because they are rich with the kind of content that web searchers need. The downside is these sites attract many tire clickers who are searching for information and not necessarily ready to buy. They are early in the Sales Cycle for that product.

Shopping Affiliate

This type of affiliate builds a site where a shopper can find buying information quickly. A shopping mall is a good analogy for this type of site. These sites can have hundreds of merchants on them. There may be very little content partly due to the fact that they cover so many niches in one place there would be little room. Product links or datafeeds work well here and also links to promotions and discounts.

Coupon Affiliate

A coupon driven affiliate is really a subset of a Shopping Affiliate. The difference may be that they only feature coupons on the site with little or no product details. If the coupon affiliate is very large, sometimes merchants provide coupons that are unique to that particular site. Obviously these sites like coupon links the best.

Reward Affiliate

Another subset of a shopping type of site with typically a reward, or cash back incentive added for completing a sale. In a sense these affiliates give part of their commission back to the visitor in hopes that they will do enough volume to justify the expense.

PPC Affiliate

These affiliates drive business and traffic from a Pay Per Click campaign directly to the merchant or to a specific optimized landing page designed for conversion. These types of affiliates may not even have a web site of their own. The issue with these types of affiliates is if the merchant is doing their own PPC, they may be competing with their own affiliates and driving up bid prices. On the other hand, this keeps the competition from bidding on the best keywords in the niche.

Email Marketing Affiliate

An affiliate who specializes in list-marketing may have built that list over a long period of time. Many email marketers have lists of hundreds of thousands. They can easily generate revenue for themselves and their merchants at almost any time. The key is to have developed a close relationship over time with their list by providing helpful information on a consistent basis. The quality of the list will be directly proportional to the trust and credibility they’ve established with their list.

Joint Ventures

This is typically a subcategory if the Email Marketing type above. The Joint Venture (JV) partner usually has a large list and in return for promoting a product to their list they will expect a special arrangement or commission. They may also want a reciprocal promotion to the merchant’s list. Actually the arrangement is often developed on a case-by-case basis and take on any format.

Review Site

With a review site the owner builds pages that compare many products in a particular category. This is where you see the Top 10 Lists for many products. Often a review site will spend considerable time analyzing and comparing the products it promotes to maintain their own credibility. If they are smart they only promote products that they have honestly reviewed.

Combination of the Above…

Of course most affiliates use combinations of the strategies above. But some do specialize in mainly one strategy because they’ve found it works for them and their merchants.

Each of these types of affiliates may need different types of links and support from a merchant. A good Affiliate Manager will provide the communication and coordination to make sure both affiliates and merchants succeed.

Go to Part 2