Wed 20 May 2009
Affiliate marketing is a blossoming trend that has helped to make companies like Amazon.com what they are today. Affiliate marketing is an internet marketing practice that basically uses one website to steer or refer consumers to another website. The practice is based on a commission model where a merchant rewards the affiliate for sending traffic to their website. Affiliate marketing is essentially a form of revenue sharing. It is widely used among e-retailers dealing in all types of industries and goods. With that said, should you consider using affiliate marketing to enhance your sales?
Types of Affiliate Marketing Programs
First, it is important to explore the different types of affiliate marketing programs. The most common revenue sharing method in use today is called "cost per sale" or CPS. CPS allocates a percentage of a sale generated from a click on an affiliate site. It is a very practical method because it ensures that the user clicks a link and then engages in a transaction before rewarding the affiliate. The other popular compensation method is "cost per action" or CPA. CPA allocates a set amount per action taken by the user that clicked on the link. Both models are effective, but their effectiveness is also dependent upon what you are selling or the services your company offers.
Pros of Affiliate Marketing
The greatest benefit of affiliate marketing is that aside from the initial startup costs, very few additional expenses are incurred. This means that you only have to pay when your affiliate marketing program generates a result. In addition, the internet is crowded with numerous competitors in any given industry, and affiliate marketing creates opportunities to generate much-needed recognition for your company. The more chances that computer users have to click links to your website, the more chances you have to enhance your sales.
Cons of Affiliate Marketing
One of the dangers of affiliate marketing is spam. While the program that you choose to partner with may have strict policies against spam, there is a possibility that regular spammers will find a way to abuse this marketing method. Finally, affiliate marketing as an industry has no governing body, very few rules, regulations or standards. This makes it vulnerable to tumultuous change.
An affiliate marketing campaign must be revised and revisited often to achieve maximum effectiveness. If you have the time and energy to invest in developing a program, chances are that it will enhance your sales.