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Affiliate Marketing 101 - Part 1

Affiliate marketing, also known as performance-based marketing , is one way to market products and services online. Traditionally it includes an advertiser and an affiliate, also known as a publisher, which would be you. An affiliate is an independent party that promotes products and/or services of an advertiser in exchange for a commission on sales made or on leads generated. The affiliate displays ads or links on its website, in emails or in search listings and is paid a commission by the advertiser if a sale is made or a lead is generated, depending on the advertiser's requirements. The advertiser or retailer is a website or company that sells a product or service online, accepts payments and fulfills orders. The affiliate places an ad or link to the advertiser's products and/or services on their website and gets paid a commission for sales or leads that result from your site. Sounds easy, doesn't it? Well, it is easy to set up and implement but not so easy to generate sales or leads. But there are a large number of people, just like you, who have discovered certain ways of doing things that work far better than others.

If you have:

  • A niche website that generate steady traffic
  • Basic HTML skills to be able to insert ready-made code for advertisements, banners, buttons and links
  • A set amount of time per week to devote to the maintenance of your website
  • A desire to generate income by working hard instead of relying on get-rich-quick schemes

Then you are a perfect candidate for being an affiliate.

Listed below are a few terms that you will be hearing as you learn more about what it takes to become an affiliate marketer.

Commission Payout – An amount of income received by a publisher for some quantifiable action such as selling an advertiser's product and/or service on the publisher's Web site.

Click-through - Also known as a click. The action a consumer takes when they are referred from a Web site through a link or advertisement and is taken to another Web site. Click-through ratio is the percentage of click for the number of advertising impressions displayed.

Cost per action (CPA)- A metric for online advertising where a rate is set for every action that is taken by an end-user.

Cost per thousand impressions (CPM)- A metric for online advertising where a rate is set for every thousand impressions.

Conversion rate- The percentage of visitors who take a desired action. The action that determines conversion is determined by the advertiser and may be a sale on the advertiser's Web site, a completed lead form, or another action.

Impression- The viewing of an advertising banner, link, or product.

Search Engine Marketing (SEM)- The act of marketing a Web site via search engines. This can be done by "natural" or "organic" search which refers to all unpaid search results based on relevance in the content site or "paid" search which refers to all pay-per-click advertising (such as on Google, Yahoo! or MSN).

Search Engine Optimization (SEO)- The process of increasing the amount of visitors to a Web site by ranking high in the search results of a search engine. Varied techniques are used by content site publishers to improve a Web page's results.