Understanding the Basic Principles and the Advantages of Affiliate Marketing

Understanding Affiliate Marketing

Affiliate Marketing is a online phrase used to describe the promotion of internet businesses by the channel of affiliate programs and the marketing of these products on websites and it dates back to the mid 90’s.By doing this the vendor compensates the affiliate (also known as the publisher) a approved percentage of commission based on the amount of trade their website brings the merchant company.

Some companies such as Clickbank, Paydotcom and Shareasale typically have set percentage rates for affiliates which can be up to 75% for some products. Some consider affiliate marketing to be a form of revenue sharing or another term regularly used is commission based advertising.

In the early days of  “affiliate marketing”, it was associated as another structure of network marketing or multi-level marketing (MLM) and as a result of this misconception allot of online businesses made the decision to use the expression “performance marketing” to steer clear of any relation to affiliate marketing. This also created a large problem for affiliates in the past,  as many online users  had a propensity to frown on whatever thing that even looked like multi-level marketing.

Over time and with a great deal of determination from those that are now established as super affiliates it has turned out to be the most cost effective way for merchants to market their products or services online as it is very efficient in the fact that the affiliate has to do all the work to make the sale. So as a result of this, many online companies especially those that embraced this form of marketing in the beginning owe a tremendous amount to affiliate marketing as a perfect example just take a look at amazon.com and the way it has become the done thing  for online companies to include affiliate marketing in many of their online strategies to promote their products.

The Advantages Of Affiliate Marketing

The model of revenue sharing has been around for some time, allot longer than online business and the internet. But the idea of affiliate marketing has taken it to new levels, and become a primary form of advertising and bringing in business for all types of e-commerce. Internet merchants find affiliate marketing highly advantageous due to the fact that it presents little to no risk both for the merchant and the ‘affiliate”.

Here is how it all works, the affiliate will earn money if the affiliate brings to the merchants website, either through on-line links on the affiliates website – or through email, blogs, RSS feeds and many other kinds of on-line communication that are available to the affiliate. If a sale is made or the desired action is accomplished then the affiliate will earn a designated commission payment from the vendor or affiliate network.

Some merchants (only about 1% of affiliate marketing) use a cost-per-click remuneration system but this is now starting to grow as a viable form of money generation from main stream affiliates by using the CPA marketing networks, which simply means that the affiliate earns some form of commission every time a website visitor clicks on an advert on their site or when you send out  an email with a affiliate link.

However in the past and mainly due to the many “blackhatters”and fraudsters online that were taking advantage of this method by way of creating such things as (ad-ware, sending spam, or keyword heavy and useless indexing sites) this form of remuneration is now allot more regulated and even to the extent of having IP addresses tracked and accounts canceled if you are generating what is considered as fraudulent clicks and for many in the past this form of advertising had become too risky for merchants to use.

What Are The Distinctive Forms Of Affiliate Marketing

There are a few different ways that an affiliate can earn commissions online. Firstly you need to decide which of these is right for you and then join the merchant affiliate program this is so any payment can be received through any referrals from your website to the merchant, Here are four methods that are currently used online today, however you need to read the terms and conditions of each affiliate program you wish to join.

  1. Pay Per Click Marketing is simply a strategy that affiliates use where they display advertisements on their affiliate site and they are then paid when a customer clicks on that website advertisement whether it is a text link or image link.
  2. Emailing your subscriber lists  sending legit emails to your website opt-ins with your affiliate link embedded “Spam Is Not Tolerated” make sure you study the TOS of the affiliate program before doing this.
  3. CPA Affiliate Marketing  is when one of your  website visitors registers with a specific site whether this is a free newsletter or subscription, free offers from other companies are represented and advertised through this form of marketing as well.
  4. Clickbank, Shareasle, Paydotcom are all affiliate marketing networks they have many thousands of products or services for you to choose from as well as being free to join. Some programs even allow multi-tier or what is called a recurring payment structure set up.

Hopefully our article has helped you to understand more about affiliate marketing and we would like to wish you well in all of your undertakings online.

Highest Profitable Affiliate Program – Best Affiliate Marketing Networks Online

What are the best affiliate programs with the highest profit potential? Believe it or not, there are tons of them, but you have to start with the one that’s best for you, especially if you’re a beginner.

Many beginners are wondering what affiliate marketing is, and how much they can earn from it. Affiliate marketing is simply promoting someone else’s products. Let’s say you have a friend named Bill selling a product and an acquaintance named Sally that is interested in the product.

You simply send the acquaintance, sally, that is interested in the product over to your friend, bill’s, store and when the person you referred buys – you and your friend split the commission, it’s that simple.

There are actually people earning anywhere from flat zero dollars a year to millions annually. It all depends on how you go about doing it, you can definitely be a successful affiliate in due time!

To be honest, most programs are essentially giving you access to unlimited profits, it’s just a matter of how you market it, how interested you are in the particular product you are attempting to promote. There are just a number of factors that play into the highest profitable affiliate program.

What to Look for in an Affiliate Program

When we refer to affiliate program, we are talking about affiliate networks or affiliate websites that give ordinary people such as you and me, extraordinary access to tons of products that are out there to promote.

Here are some of the qualities of the best programs:

o Wide variety of items to promote
o Great commissions
o Recurring products (products that pay on a schedule, using monthly)
o Different Payment Options
o Stat tracking
o Quick and Consistent Payments
o Easy to Use interface

These are just some of the features that you should look for, and there are affiliate programs that have all these features and more! So you should look into it. One of the most highly recommended and best programs out there is known as “Click-bank”, as there are already thousands of affiliates who were complete beginners and are currently earning “full-time income”.

The Ins and Outs of Affiliate Marketing Campaigns

Let the professionals help you… in mass:

Affiliate marketing networks provide an environment where companies who have something to sell (Advertisers) meet with companies who know how to sell it (Publishers). Many large Affiliate marketing networks provide hundreds of products to be sold to their network of thousands of publishers.

Affiliate marketing networks generally work on a performance basis (CPA), where you only pay when a sale or lead is generated for you. You receive a sale or lead at a predetermined cost and then award the affiliate network with a bounty for generating the sale or lead for you. The Affiliate network then pays their publishers for generating sales on your behalf, minus what the network keeps for itself for putting the deal together. This may sound similar to a shopping portal, however there are some distinct differences. A shopping portal places your products in direct connection with the online shopper. Affiliate marketing networks place your products in direct connection with publishers (marketing or media companies.) Each publisher will then use their own resources to generate sales for you, be it PPC, SEO, email, banners and the like.

Not every product or service will work with an affiliate marketing campaign, and many affiliate networks will not accept your offer unless certain criteria are met. The average website is not “marketing ready” for an affiliate marketing campaign, and often requires a redesign or a separate website to allow for easy sales or lead conversions. Most sales lead generation campaigns work across affiliate marketing networks as long as you are not trying to collect too much information, or information that makes your customers feel nervous such as a social security number. For product sales, you need to present a very attractive offer like “a free 7 day trial for a diet pill”, “free services for 1 month”, or anything that can be considered a low risk bargain. An offer such as “a 42 inch plasma screen Television for only $1,597” will not work. As always, there are exceptions, and you may need to work closely with your affiliate manager to produce a campaign that will be popular amongst the publishers.

Due to the nature of the affiliate networks, they can be volatile and risky, and are not recommended for any company until they have a lot of internet marketing experience under their belt. The overall sales potential of affiliate network marketing can be enormous, and any time gigantic sales numbers come into play, so do gigantic risks. Many affiliate networks have what are known as “Super Affiliates” who have the potential to generate hundreds of thousands of dollars in sales commissions each month. The volatility stems from both the marketing power available through an affiliate network, along with the performance-based environment they provide.

For the most part, the publishers who do the selling through the affiliate networks are greedy. They want to sell only the products and services that yield them the most revenue. It is their right, after all, because they are working on a performance basis and assume all marketing risks. If a good offer comes across an affiliate network, where a lot of money can be made, many publishers will market the product and sales will come streaming in. If a product comes in that does not generate good, or at least acceptable, revenue for the publishers, they will chose to not market the product and sales will be almost nonexistent. It is difficult to find the right balance to satisfy all parties involved (advertiser, publisher, affiliate network, and potential customer.) All parties must be happy in order to yield a successful affiliate campaign. The swing between a high performing campaign and an unpopular one can be tremendous. This volatility introduces significant risk, which comes in three flavors.

Affiliate Network Marketing Risk:

  • (1) Not enough business You have put significant time and resources into building an Affiliate marketing campaign. You have commissioned all types of marketing creative, website design and even bulked up your sales staff. Despite this preparation, your offer is not a money maker for the publishers, and they are not marketing your campaign. Your expenses have increased in anticipation of increased sales that simply never materialized.
  • (2) Too much business You hit the nail on the head… Your offer is hot and the publishers love it. They love it so much that sales flow in faster than you can handle. Your call center can handle 50 leads per day but the publishers are generating 200. For each sale or lead made you must pay a commission whether or not you can address it. You are literally downing in too much business, and your pocketbook can’t hold out long enough to expand accordingly.
  • (3) Cheating You didn’t invest much effort in validating your sales or leads. Your affiliate marketing campaign is generating a lot of leads, but sales are not happening. You are receiving numerous disconnected phone numbers, invalid credit card numbers or people who say “I only signed up for the free gift.” Leads are coming in, but a bunch of crooked publishers are submitting fake information to get paid as if their data was real. Notice how that last lead had a Texas area code, their zip code was “12345,” they stated they live in Alaska and gave you the credit card number “4444555544445555.”

Many Affiliate marketing networks will also ask if they can run your campaign exclusively. This means that they are the only affiliate network that can provide your offer to the world. There are some distinct advantages and disadvantages to running your campaign exclusively with one network.

Exclusive Affiliate network Campaign Advantages:

  • Your Affiliate marketing campaign manager may pass your campaign on to other affiliate marketing networks, and manage your account for you. This saves you considerable time by not having to seek out new networks, organizing campaign launches, marketing creative, and other tasks required to launch a new campaign.
  • You will not have to pay startup fees or sign contracts for the affiliate marketing networks that your affiliate manager passes your campaign on to. You simply work under your single agreement with your affiliate manager. This can save you thousands of dollars in startup costs, and lots of time.
  • Affiliate marketing networks use exclusive campaigns as “bragging rights,” and often give priority to their exclusive campaigns. Your campaign is more likely to be advertised to the publishers and given special attention. This helps to get your campaign noticed by the publisher, and ultimately increases sales or lead flow.

Exclusive Affiliate network Disadvantages:

  • Your campaign manager will outsource your campaign to other affiliate marketing networks. You will not know exactly who is marketing your offer and therefore the quality of the web traffic coming into your website is unknown.
  • Your affiliate manager may not be as ambitious as you. Your campaign may not get passed on to other affiliate marketing networks, and because it is an exclusive offer you can’t pass it on to other networks. Growth may become stifled.
  • The publishers who run your campaign through outsourced affiliate networks will not receive as high of a payout (sales commission). There are effectively two affiliate marketing networks: Your direct affiliate network and the outsourced network. More hands are in the pot, taking money and leaving less for the publishers themselves. The decreased publisher bounty with result in decreased interest in your campaign, so the outsourced affiliate marketing networks will not be as productive as if you worked with them directly.

Most affiliate networks will want to incorporate email marketing into your campaign. This is strongly recommended, as sales or lead generation volumes could be significantly higher. If you do allow your campaign to be email marketed, you will need to be able to maintain an email suppression list. The suppression list is a list of email addresses of people who want to opt-out from receiving your offer. An opt-out link must be provided on your email marketing creative where people can opt-out from your offer. You must then supply the suppression file to your affiliate network so they can in turn pass your suppression file to their publishers. This is a part of the Can-Spam law and it can be effectively managed with a small opt-out landing page connected to a simple database. Make sure you provide an updated suppression file to the affiliate networks at least once per week.

Launching affiliate marketing campaigns that convert:

  • Your goal is to generate a campaign that puts the most money possible into your publisher’s pockets, while also generating a profit yourself. Keep in mind that a break-even campaign is also a successful campaign as long as you can re-market to your clients and generate additional sales, upgrades, etc.
  • Design your campaign to maximize conversions. Minimize the clicks needed to purchase a product, or have your lead generation form on the home page. Don’t collect information that you really do not need, or that people do not like to give out (like an SSN.) You may have to build a unique website for the affiliate marketing campaign if your current website is not fine-tuned for affiliate marketing.
  • You are competing against all of the other campaigns on an affiliate network, not just ones selling the same thing you are. Publishers optimize the offers they market and drop the poor performing campaigns. Design an offer that works both for you and your publishers; your affiliate manager can help.
  • Make the steps necessary to allow your campaign to be email marketed by the publishers. This means you will need to create Can-Spam compliant email marketing creative, an opt-out page linked to a database, and provide access to an updated suppression file (a text dump of your database suppression file.) Email marketing will significantly amplify your campaign’s effectiveness.
  • Develop a large selection of various marketing creative, lots of standard size banners, multiple email creative, multiple email titles and subject lines, various text links and so on. Your affiliate manager will provide you a list of critical media types and sizes, but try to provide more than their minimum requirements.
  • Stay on top of lead quality and fraud. No matter how advanced your validation system may get, someone will try to sneak fake data past you. Make sure that you can track all lead sources, including the subIDs that are passed on through the affiliate network.
  • Every time you make a change to your website, submit a test to ensure that the affiliate campaign is still running as it should be. If your website has an error preventing sales conversions or introduces tracking problems, you may be asked to pay the publishers for their lost business. Remember that your broken website will affect many companies who stuck their neck out for you.
  • Be prepared for large volumes of leads, or no leads at all.

The risks associated with affiliate network marketing are many, and they are significant. You must be on your toes, thinking ahead and quick to move if things turn sour. But if you come prepared and design an offer that the publishers love, the financial rewards can be enormous.

Affiliate Marketing VS Product Creation

This is a huge obstacle many people face when entering the online marketing world: Should I become an affiliate marketer or should I create and sell my own product..?
Before I get started let me quickly define the two business models so that we are clear as to how money is generated with each.

• Affiliate Marketing: In this business model you will be making income by referring customers to another person’s product or service. So basically you will sign up with the vendor as an affiliate and for every sale you generate you get paid a commission.

• Product Creation: This business model is pretty self explanatory; you will be creating a product and selling it in the marketplace for 100% of the profits. In this example we will be assuming your product is an information product of some sort.

There are a lot of marketers that will say the easiest way to start making money online is affiliate marketing. Just because of the simple fact that you can choose a vendor whose product you want to promote, sign up as an affiliate, start sending traffic to your affiliate sales page and BOOM! You make money. Sounds pretty easy. You don’t have to deal with creating a product, setting up websites, dealing with customers, etc.

At the same time there are marketers that say creating your own product is easier and the more profitable of the two and allow you to be more in control of your business.
It really all depends on what your strengths and weaknesses are and what you’re looking to accomplish in your business.

Let me get some of the pros and cons of each and put things into perspective so you can have a better idea of where you want to get started.

Affiliate Marketing

It is a strong argument that affiliate marketing is the easier of the two to start with which is why it is recommended as a starting point for beginners.
Here are a few of the pros of affiliate marketing:

• Most affiliate vendors/networks are free and very easy to join. Most of the time you will answer a few basic questions, set up a username and password and get instant access to the affiliate member’s area within a few minutes.

• Marketing materials are provided. Once you set up your profile in the affiliate member’s area you will have complete access to all marketing materials needed to get you going such as banners, pre-written emails, etc. In the members area you will also be provided a unique affiliate link which will take your prospects to a complete sales page which has already been created for you. Armed with these materials all you have to focus on is getting traffic to your affiliate site.

• All websites are already created for you. As an affiliate you do not have to deal with the headaches that can come with setting up a website. The vendor has done this for you and as long as you use your affiliate link your sales and commissions will be tracked through that link and paid into your account.

• Do not have to deal with customers. We all know how difficult it can be to deal with customers but as an affiliate you do not have to worry about this problem. Once you make a sale as an affiliate all you have to worry about is cashing your check and the customer is passed on to the vendor.

As you can see being an affiliate marketer definitely has its perks. It’s quick and easy to join a vendor/network, all the marketing materials and sales pages are provided and you do not have to deal with customers. You can focus your time on generating traffic, making sales and cashing checks!

Now let’s take a look at some of the cons of affiliate marketing and how you can overcome them.

• The competition. Even though it can argued that affiliate marketing is the easiest way to make money online it can be strongly argued that it’s the most difficult due to the competition. There are hundreds of thousands of affiliate marketers you have to compete with to make a sale. At the same time many experienced marketers agree that most new affiliate marketers do not know what they’re doing since it’s such an easy business to get into.

– One of the best ways to overcome this obstacle is to educate yourself. Always be a step ahead of the competition by learning what the top affiliates are doing to give them that edge needed to make the sale.

• Profit Margins. As I mentioned before with affiliate marketing you are making a commission for referring a customer to a vendor as opposed to you being the creator of the product and earning 100% of the sale. So there can be a lot of profits you are leaving on the table by promoting someone else’s product instead of your own.

– This obstacle is really not in your control when it comes to affiliate marketing but the best thing you can do is promote a product with a higher payout of 60-80% as opposed to 25-50%. This way you will be making more income with less sales.

• Building someone else’s business. As an affiliate not only are you generating sales and profits for the vendor you are also helping them build their business instead of your own. Once you make a sale and are paid a commission that customer is now in the hands of the vendor which can continue to sell additional products and services to that customer for the lifetime of their relationship.

– The best way I know of building your own business through affiliate marketing while also sending customers to the vendor is to set up a landing page of your own that requires the prospect to input their name and email before they get access to the sales page. This way the prospect is on your customer list as well and you can now email them future offers and affiliate products directly. Now of course you will have to provide an incentive to the prospect for them to enter their email like giving away a free report, video training, audio file, etc. We will touch on this in a future report.

• Lack of control. With affiliate marketing you really don’t have much control of anything but generating sales. Should the vendor/network decide to shut down or no longer sell the product you are promoting you are left back at square one. When it comes to product creation you have a lot more control of your business and can profits but we’ll be touching on that in a few.

– Unfortunately this is a huge downside to affiliate marketing and something you really can’t prepare for. Building your email list as mentioned before is the best way to ensure that you still have an ability to make sales with your current list of customers while you set up a new campaign with a new product.

There are just as many cons as pros with affiliate marketing but none of these reasons should stop you from getting started if it’s a business you wish to pursue. One important thing that you want to keep in mind is to take time to invest in your education and skill sets to put yourself ahead of the curve. By doing this you set yourself apart from the competition and a step ahead to making the sale.

If you are interested in learning more about affiliate marketing and jump starting your way to success visit my author resource box.

Now, just for a second picture yourself being the product creator and having an army of affiliates promoting your products as we move into the pros and cons of Creating and selling your own product.

Product Creation

Product creation can be a scary subject for many because as a newbie you are most likely skeptical and completely in the dark as to how an online business operates, let alone creating a product from scratch. But to your surprise it can actually be one of the easiest ways to make money online.
Let’s get into some of the pros of creating and selling your own product and see why it can be an avenue you consider:

• Control. When it comes to product creation you are in complete control of just about everything. You are in control of how you market your product, the price, its delivery, and you are in full control of every customer you bring into your business as well as any future purchases they make from you.

• Profits. Of course this is a huge reason why many people create and sell their own products. As a product creator you get to keep 100% of the profits from every sale you make. Now there is an exception to this when it comes to setting up your own affiliate program and having other affiliates promote your products but we’ll touch on the power of this next.

• Affiliates. Once you create your unique product you can choose to leverage others to help build your business. Setting up an affiliate program can be a powerful way to explode your business on autopilot. You can offer your affiliates a commission of 30-50% and have them sell their butts off for you especially if your product brings high value to the marketplace. Also you can make money while you sleep as you know your affiliates are working hard to make you sales.

• Building a Brand. Being the product creator gives you the opportunity to build a brand for yourself in the marketplace of your chosen topic. Since your product is unique you are able to name the product whatever you like and build a brand around that topic. This is very big if you want to build your business through word-of-mouth advertising which we all know is the strongest form of advertising.

As you can see there are also some great advantages to creating and selling your own product. You are in full control of everything, you will earn more money, you can build an army of affiliates, and you can build a brand for yourself and your business. But as in everything there is a downside so let’s get into that next.

Here are a few cons of product creation and how you can overcome them:

• Time. When it comes to your time, creating your own product will definitely take up more of your time then simply signing up as an affiliate. Not only will it take time to create your product, but you also have to create a website to sell your product from. And that can be a headache of its own which we will talk about next.

– The great thing about product creation is you can outsource just about every process involved in starting your business. You can literally pay a professional writer to write your information product for you and you take the credit for it. Of course you always want to proof read it and modify a bit to fit your personality and style.

• Websites. Once your product is completed you will not be able to make any profit unless you are able to get it published online. For some this can be your worst nightmare. This can cause you a lot of headaches especially if you are not tech savvy. This can easily cause you to quit or never begin to try to make money online, or it can cause you to have to hire a web designer to build a site for you which can be a few hundred to a few thousand dollars in cost. This leads me to my next topic.

– Again building a website can easily be outsourced to a web designer who can build you a clean professional website usually within 48-72 hours.

• Cost. When it comes to creating a product it can easily be said you will have more start up costs then an affiliate. When it comes to setting up your sales funnel you have certain costs like buying a domain, hosting your website, hiring a web designer to set up you site unless you’re doing it yourself, paying for the graphics to brand your product, etc.

– A lot of you may be asking yourself how much are you going to expect to spend on your product creation business? Don’t worry take a deep breath..a lot of the things you will be paying for are really inexpensive. You can buy a domain for about $10 and hosting is about $5 a month. Now I want to introduce you to a site that will dramatically change the way you do business it’s called http://www.Fiverr.com. This is a community of people that are willing to just about anything for $5. Go ahead and visit the site and see for yourself. You can literally have an information product created on a topic of your choice, the graphics and ebook cover created, and a website build for $25-$30.

• Customer Support. As the product owner you will be responsible for your customer service and support and this alone can drive you insane and drain a lot of your time and energy. As in any business on or offline you will have your happy customers and your not so happy customers. Your customers will have questions, demands, concerns, etc and it is your responsibility to make sure they get the support they deserve.

– Customer support can also be outsourced but unfortunately this comes with the territory of any business and something you will have to deal with. Yes you can have someone take care of your customers service but you should definitely be as involved as possible to make sure they are getting the best support possible.

As you can see as a product owner, yes you will be in control, yes you will make more money, and yes you can build a brand, but with all this comes a lot more responsibility then an affiliate marketer.
Before wrapping things up lets touch on a few things that we can all agree on in both affiliate marketing and product creation.

• Work from home. Whether you are an affiliate marketer or promoting your own products both allow you to be in control of your time and work from home. For many this a highly sought after luxury to be able to spend more time with family, friends, spouse, etc.

• Your day job. Unless you are a super marketer and were born with super online business skills most of you will still be working your day job as you build your online business. With that said you can build your online business on a part-time or full-time basis around your current work schedule whether it is one hour a day or ten hours a day whatever it is that works for you make sure you keep it consistent. Make sure you schedule your online business time just as you would schedule any other activity and make this non-negotiable.

• You’re the boss. No matter if you’re marketing as an affiliate or your own product, you are your own boss in both situations and your income is directly influenced by your efforts. This also allows you to make money on demand. If you’re looking to take a vacation or buy a new car and you need a few thousand dollars you can just jump on your computer and set up a new marketing campaign.

If you are leaning more towards creating your own products visit my author resource box.

In conclusion there really is no right or wrong, better or worse, that was not the point of this article. The point of this report was to shed some light on both business models so that you can be more aware of what you can expect in moving forward with your online business. In my opinion there shouldn’t have to be a choice between affiliate marketing and creating your own product. You should integrate both into your business plan and become educated in both arenas. By doing that you will quickly see that many top affiliate marketers make a killing selling their own products and many people who sell their own products make a killing as affiliate marketers.

One thing I do want to stress is no matter what you do it is going to take time, effort and hard work. Don’t fall into the trap that many newbie’s do which is consistently searching for the next plug and play system that is going to make you the next overnight millionaire. And there are plenty of “Guru’s” out there who prey on the newbie community and put out junk products promising overnight millions with pretty sales pages and you continue to fall for them. STOP!! Map out a business plan, decide what you want to accomplish, find one reputable mentor you want to follow and get to work! Focus on following that chosen mentor all the way through to your first online dollar. Lastly, make a promise to yourself that you will not quit before starting the journey!

To Your Success,

Joshua Zamora