What is Affiliate Marketing?

If you have a website, or have been seeking a method for earning money on your website, you may have run into the term Affiliate Marketing. What is Affiliate Marketing?

Briefly, Affiliate Marketing is a method for advertisers to expand their reach with minimal costs, and for “publishers” to gain commission income when buyers respond to affiliate ads placed on their website, or otherwise advertised by the publisher. Advertisers are companies who want to have their ads placed on websites and used in other types of advertising, such as emails, without incurring out-of-pocket advertising expenses. Publishers are website owners and other non-employee agents who want to gain commission income by freely publishing ads that generate sales for the advertisers.

There are website locations that offer a one-stop shopping experience for publishers where the publisher can view and select from hundreds of advertisers, and sign up to be an affiliate with those companies. This is like a clearinghouse for advertisers, and makes finding affiliate programs easier for publishers. Three popular websites for this are: Commission Junction, LinkShare, and Kolimbo. For advertisers, these clearinghouse companies make finding affiliate programs much easier for publishers. Working through one of these clearinghouses also makes getting paid easier. The publisher registers pertinent information such as name, address, social security number or TIN, with just one source instead of many. They are paid from the clearinghouse instead of directly from the company. The obvious alternative is to do research and find various companies who offer affiliate programs directly. One way to locate this information is at the bottom of the company’s website where you find contact information.

Once you sign up to be an affiliate marketer, you are allowed to select the ads you wish to run, and copy the special codes for them. These codes include a special ID which tracks ad clicks from your website and any subsequent sales. By pasting the codes into your website, banner or text ads will appear. When someone clicks through an ad and purchases an item, you will receive a commission. Commission rates vary. Also, when a buyer or looker clicks through on an advertisement, that website will deposit a special “cookie” onto that customer’s computer so future sales can be tracked and commissions paid if required. These cookies are good for varying periods of time. Following a sale, the company will either pay the affiliate marketer directly or through the sign-up clearinghouse, usually monthly.

One potential problem to avoid when selecting affiliate programs is that you do not want to look like a “banner farm”, with your website covered with wall-to-wall ads. It is better to select just a few that correspond to your website content, narrowing the focus. This should result in better action. Having too many ads is confusing and too wide a variety of ads is overwhelming.

Many people are enjoying the benefits of the Affiliate Marketing relationship; it is easy to set up and use, and could generate a nice income from your website.