Affiliate, Associate or
Referral Marketing
Paul
J. Gibler
The
internet has spawned all sorts of new marketing and
sales models. One
of the more interesting ones is affiliate or associate
marketing. The
concept behind affiliate marketing is to drive traffic
through links or banner ads from the referring site to
the vendor site with commissions paid to the referring
site based on one of the following models:
- Pay
per click, per lead, per completed application, per
sale, per customer relationship gained
- Volume
based bonus
- Some
other agreed to business metric
The
affiliate wins through commission income and the vendor
wins through the establishment of a broader distribution
network. The
granddaddy of affiliate marketers is Amazon.com.
They launched their program as a way to rapidly
build traffic and sales by having a large network of
referring sites. Today,
Amazon has over 300,000 affiliates and is paying up to
15% for a completed sale.
A recent ad for the AOL affiliate program
described their compensation model as the following
“Every time you generate a new member for AOL who stays
for 90 days, AOL will pay you $15. Plus...AOL pays
monthly bonuses of more than $1,000 as well as annual
bonuses of $100,000 or more.”
To
manage the potentially large volume of business and
information related to affiliate programs a number of
infomediaries have sprung up including:
http://www.affiliateadvisor.com/
http://www.qcommerce.com/affiliatedirect/
http://www.affiliatetips.com/
http://www.affiliatematch.com
http://www.affiliateworld.com/
http://www.associateprograms.com/
http://www.befree.com/
http://www.clickquick.com/
http://www.clicktrade.com
http://www.cj.com/ - Commission Junction
http://www.linkshare.com/
http://www.nexchange.com/
http://www.revenews.com/
Affiliate relationships are based on a mutual evaluation
of fit. Questions that get asked include:
Does the ...
- referring site offer enough potential traffic?
- relationship
cheapen either parties brand?
- vendor create promotional programs that tie into the
affiliate network?
- relationship result in a contextual marketing
scenario, with some logical tie between the parties?
- relationship include good traffic and
measurement reporting?
- vendor provide effective and attractive visual
links or other text links for the program?
Reproduced from
MadAdFed Newsletter -
March 2000
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