Affiliate Marketing Definition – What is It?
If you are new to affiliate marketing and would like to know what it means, read this article to get an easy to understand affiliate marketing definition. Affiliate marketing is a specific form of sales-based marketing, where a merchant rewards one or more affiliates for every customer or visitor brought about by the affiliates marketing efforts. Merchants pay commissions based on how many sales are made and not on the number of visitors. There are many ways to monetize affiliate marketing – Pay Per Click (PPC), Pay Per Action (PPA) and Pay Per Lead (PLL). Each method has its own advantages and disadvantages and should be evaluated carefully before entering into any agreement.
A PPC or pay per click advertisement is usually displayed on sponsored web pages and can offer affiliate marketers pay per click based compensation. This method tends to yield the highest return on investment (ROI) because of the targeted audience and highly targeted keywords used. Although cost per click is a common pay per action method, many marketers are using the PPC as a preferred method due to the ease of setting up and the low cost associated with these campaigns. This is also a highly effective and efficient way to generate traffic to a website as there is little or no risk associated with the campaign.
Pay per action or pay per lead is a form of affiliate marketing program that uses the visitor to simply sign up for information or products. Once signed up, the visitor is sent a link to a landing page that contains more information and a sales pitch for the merchant. The idea behind this format is to convince the visitor to either complete a survey or opt in to a website. Once the visitor completes the action or completes the product the merchant will be credited for the purchase. The problem with this type of affiliate marketing program is that there is no way for the marketer to know which action caused a sale and which did not. Consequently, it is difficult to assess the success of a particular PPC campaign and to determine if it was worth the effort of pushing the visitor to the affiliate link or page.
A paid based affiliate marketing program is a hybrid of the pay per action and pay per lead affiliate marketing programs. The difference between the two is that the affiliate does not get credit for the visitor completing a task. Instead the marketer only pays the marketer once the visitor has completed one action. The benefit to this type of marketing is that there is some measure of success that can be tracked.
Many affiliate marketing programs use the pay per lead method in their compensation model. With this type of compensation model the marketer makes money each time a visitor completes a specific action such as filling out a form or clicking on a link. The primary drawback to this type of affiliate marketing program is that there is no way to measure the success of an ad campaign. The advertiser must decide whether or not the cost per action will be worth the cost to create and maintain the campaign.
The second affiliate marketing definition I am going to discuss is the pay per action model. In this model the marketer receives a certain percentage of the commission when a visitor performs a certain action. For example, if you are promoting a website about dog training then you would likely want to focus your attention on the affiliate marketing definition of the dog training industry. You would want to find a dog training affiliate program that offers products related to the dog training industry. By focusing your attention on these affiliate-marketing programs you are increasing the chances that someone performing a specific action will complete a certain action.
There are two other affiliate marketing definitions that have very different requirements. The first is the CPA (Cost Per Action) model. In this model the marketer gets a certain percentage of the commission each time a visitor performs a certain action. This is the model that is used by Click bank and Amazon. The second affiliate marketing definition is the PPS (Pay Per Lead) model. This model allows the marketer to get paid only if the lead performs a specific action such as signing up for a free newsletter or filling out a survey.
Hopefully this short article has given you some starting points to begin your affiliate marketing business. There are many affiliate marketing programs and ways to promote your affiliate programs. The three affiliate marketing definition I provided you with are the most popular and they provide you with an opportunity to make money online. There are many more affiliate marketing programs but these three will give you an idea of how to get started. Good luck on your search to make money online!