I forgot I joined back in late 2014 with everything coming unglued for me back then. Well Here we go again Staying focused was not my best gift when I had the world crushing down on me again!
Here is a little video on It check it out and see what you think I am going to read up on it again and try it out myself.
Introduction from
eBay Partner Network TV on
Vimeo.
Affiliate marketing is a type of
performance-based marketing in which a business rewards one or more
affiliates for each visitor or customer brought by the affiliate's own marketing efforts.
The industry has four core players: the
merchant (also known as 'retailer' or 'brand'), the
network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as 'the affiliate'), and the customer.
The market has grown in complexity, resulting in the emergence of a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party
vendors.
On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
Affiliate marketing is commonly confused with
referral marketing, as both forms of marketing use third parties to drive sales to the retailer.
However, both are distinct forms of marketing and the main difference between them is that affiliate marketing relies purely on financial motivations to drive sales while referral marketing relies on trust and personal relationships to drive sales.
Affiliate marketing is frequently overlooked by advertisers.
[1]
History
Origin
The translation of the revenue share principles to mainstream e-commerce happened in November 1994,[2] almost four years after the origination of the World Wide Web.
The concept of affiliate marketing on the Internet was conceived of, put into practice and patented by
William J. Tobin, the founder of PC Flowers & Gifts.
Launched on the Prodigy Network in 1989, PC Flowers & Gifts remained on the service until 1996. By 1993, PC Flowers & Gifts generated sales in excess of $6 million per year on the Prodigy service.
In 1994, Tobin launched a beta version of PC Flowers & Gifts on the Internet in cooperation with
IBM, who owned half of Prodigy.
[5]
By 1995 PC Flowers & Gifts had launched a commercial version of the website and had 2,600 affiliate marketing partners on the World Wide Web.
Tobin applied for a patent on tracking and affiliate marketing on January 22, 1996 and was issued U.S. Patent number 6,141,666 on Oct 31, 2000.
Tobin also received Japanese Patent number 4021941 on Oct 5, 2007 and U.S. Patent number 7,505,913 on Mar 17, 2009 for affiliate marketing and tracking.
[6]
Cybererotica was among the early innovators in affiliate marketing with a
cost per click program.
[8]
In November 1994,
CDNOW launched its BuyWeb program.
CDNOW had the idea that music-oriented websites could review or list albums on their pages that their visitors might be interested in purchasing.
These websites could also offer a link that would take visitors directly to CDNOW to purchase the albums.
The idea for remote purchasing originally arose from conversations with music label
Geffen Records in the fall of 1994.
The management at Geffen wanted to sell its artists' CD's directly from its website, but did not want to implement this capability itself. Geffen asked CDNOW if it could design a program where CDNOW would handle the
order fulfillment.
Geffen realized that CDNOW could link directly from the artist on its website to Geffen's website, bypassing the CDNOW home page and going directly to an artist's music page.
[9]
Amazon.com (Amazon) launched its associate program in July 1996: Amazon associates could place
banner or text links on their site for individual books, or link directly to the Amazon home page.
[10]
When visitors clicked from the associate's website to Amazon and purchased a book, the associate received a commission.
Amazon was not the first merchant to offer an affiliate program, but its program was the first to become widely known and serve as a model for subsequent programs.
[11][12]
In February 2000, Amazon announced that it had been granted a
patent[13] on components of an affiliate program.
The patent application was submitted in June 1997, which predates most affiliate programs, but not PC Flowers & Gifts.com (October 1994), AutoWeb.com (October 1995), Kbkids.com/BrainPlay.com (January 1996), EPage (April 1996), and several others.
[8]
Historic Development
Affiliate marketing has grown quickly since its inception. The
e-commerce website, viewed as a marketing toy in the early days of the Internet, became an integrated part of the overall business plan and in some cases grew to a bigger business than the existing offline business.
According to one report, the total sales amount generated through affiliate networks in 2006 was £2.16 billion in the
United Kingdom alone. The estimates were £1.35 billion in sales in 2005.
[14]
MarketingSherpa's research team estimated that, in 2006, affiliates worldwide earned US$6.5 billion in bounty and commissions from a variety of sources in retail, personal finance, gaming and gambling, travel,
telecom, education, publishing, and forms of
lead generation other than
contextual advertising programs.
[15]
In 2006, the most active sectors for affiliate marketing were the adult, gambling, retail industries and file-sharing services.
[16]
The three sectors expected to experience the greatest growth are the
mobile phone, finance, and travel sectors.
[16]
Soon after these sectors came the entertainment (particularly gaming) and Internet-related services (particularly
broadband) sectors.
Also several of the affiliate solution providers expect to see increased interest from
business-to-business marketers and advertisers in using affiliate marketing as part of their mix.
[16]
Web 2.0
Websites and services based on
Web 2.0 concepts—
blogging and
interactive online communities, for example—have impacted the affiliate marketing world as well. The new media allowed merchants to become closer to their affiliates and improved the communication between them.
Web 2.0 platforms have also opened affiliate marketing channels to personal bloggers, writers, and independent website owners.
Regardless of web traffic, size, or business age, programs through
eBay,
Google,
LinkShare,
Clickbank and
Amazon allow publishers at all levels of web traffic to place contextual ads in blog posts.
Forms of new media have also diversified how companies, brands, and ad networks serve ads to visitors. For instance,
YouTube allows video-makers to embed advertisements through Google's
affiliate network.
[17][18]
New developments have made it more difficult for unscrupulous affiliates to make money. Emerging black sheep are detected and made known to the affiliate marketing community with much greater speed and efficiency.
[citation needed]
Compensation methods
Predominant compensation methods
Eighty percent of affiliate programs today use
revenue sharing or
pay per sale (PPS) as a compensation method, nineteen percent use
cost per action (CPA), and the remaining programs use other methods such as
cost per click (CPC) or
cost per mille (CPM, cost per estimated 1000 views).
[citation needed]
Diminished compensation methods
Within more mature markets, less than one percent of traditional
affiliate marketing programs today use cost per click and cost per
mille. However, these compensation methods are used heavily in
display advertising and
paid search.
Cost per mille requires only that the publisher make the advertising
available on his website and display it to his visitors in order to
receive a commission.
Pay per click requires one additional step in the
conversion
process to generate revenue for the publisher: A visitor must not only
be made aware of the advertisement, but must also click on the
advertisement to visit the advertiser's website.
Cost per click was more common in the early days of affiliate marketing, but has diminished in use over time due to
click fraud
issues very similar to the click fraud issues modern search engines are
facing today.
Contextual advertising programs are not considered in the
statistic pertaining to diminished use of cost per click, as it is
uncertain if contextual advertising can be considered affiliate
marketing.
While these models have diminished in mature e-commerce and online
advertising markets they are still prevalent in some more nascent
industries.
China is one example where Affiliate Marketing does not
overtly resemble the same model in the West.
With many affiliates being
paid a flat "Cost Per Day" with some networks offering Cost Per Click or
CPM.
Performance/Affiliate marketing
In the case of
cost per mille/click,
the publisher is not concerned about a visitor being a member of the
audience that the advertiser tries to attract and is able to
convert,
because at this point the publisher has already earned his commission.
This leaves the greater, and, in case of cost per mille, the full risk
and loss (if the visitor can not be converted) to the advertiser.
Cost per action/sale methods require that referred visitors do more
than visit the advertiser's website before the affiliate receives
commission.
The advertiser must convert that visitor first. It is in the
best interest for the affiliate to send the most closely targeted
traffic to the advertiser as possible to increase the chance of a
conversion.
The risk and loss is shared between the affiliate and the
advertiser.
Affiliate marketing is also called "performance marketing", in
reference to how sales employees are typically being compensated.
Such
employees are typically paid a commission for each sale they close, and
sometimes are paid performance incentives for exceeding objectives.
[19]
Affiliates are not employed by the advertiser whose products or
services they promote, but the compensation models applied to affiliate
marketing are very similar to the ones used for people in the
advertisers' internal sales department.
The phrase, "Affiliates are an extended sales force for your
business", which is often used to explain affiliate marketing, is not
completely accurate.
The primary difference between the two is that
affiliate marketers provide little if any influence on a possible
prospect in the conversion process once that prospect is directed to the
advertiser's website.
The sales team of the advertiser, however, does
have the control and influence up to the point where the prospect signs
the contract or completes the purchase.
Multi-tier programs
Some advertisers offer multi-tier programs that distribute commission
into a hierarchical referral network of sign-ups and sub-partners.
In
practical terms, publisher "A" signs up to the program with an
advertiser and gets rewarded for the agreed activity conducted by a
referred visitor.
If publisher "A" attracts publishers "B" and "C" to
sign up for the same program using his sign-up code, all future
activities performed by publishers "B" and "C" will result in additional
commission (at a lower rate) for publisher "A".
Two-tier programs exist in the minority of affiliate programs; most
are simply one-tier. Referral programs beyond two-tier resemble
multi-level marketing (MLM) or network marketing but are different:
Multi-level marketing
(MLM) or network marketing associations tend to have more complex
commission requirements/qualifications than standard affiliate programs.
[citation needed]
From the advertiser's perspective
Advantages for merchants
Merchants favor affiliate marketing because in most cases it uses a
"pay for performance" model, meaning that the merchant does not incur a
marketing expense unless results are accrued (excluding any initial
setup cost).
[20]
Implementation options
Some merchants run their own (in-house) affiliate programs using
dedicated software, while others use third-party intermediaries to track
traffic or sales that are referred from affiliates.
There are two
different types of affiliate management methods used by merchants:
standalone software or
hosted services,
typically called affiliate networks.
Payouts to affiliates or
publishers can be made by the networks on behalf of the merchant, by the
network, consolidated across all merchants where the publisher has a
relationship with and earned commissions or directly by the merchant
itself.
Affiliate management and program management outsourcing
Uncontrolled affiliate programs aid rogue affiliates, who use
spamming,
[21] trademark infringement,
false advertising,
cookie stuffing,
typosquatting,
[22] and other unethical methods that have given affiliate marketing a negative reputation.
Some merchants are using outsourced (affiliate) program management (OPM) companies, which are themselves often run by
affiliate managers and
network program managers.
[23]
OPM companies perform affiliate program management for the merchants as a service, similar to the role an
advertising agencies serves in offline marketing.
Types of affiliate websites
Affiliate websites are often categorized by merchants (advertisers)
and affiliate networks. There are currently no industry-wide standards
for the categorization. The following types of websites are generic, yet
are commonly understood and used by affiliate marketers.
- Search affiliates that utilize pay per click search engines to promote the advertisers' offers (i.e., search arbitrage)
- Price comparison service websites and directories
- Loyalty websites, typically characterized by providing a reward or incentive system for purchases via points, miles, cash back
- Cause Related Marketing sites that offer charitable donations
- Coupon and rebate websites that focus on sales promotions
- Content and niche market websites, including product review sites
- Personal websites
- Weblogs and website syndication feeds
- E-mail marketing list affiliates (i.e., owners of large opt-in -mail lists that typically employ e-mail drip marketing) and newsletter list affiliates, which are typically more content-heavy
- Registration path or co-registration affiliates who include offers
from other merchants during the registration process on their own
website
- Shopping directories that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updates
- Cost per action networks (i.e., top-tier affiliates) that expose
offers from the advertiser with which they are affiliated to their own
network of affiliates
- Websites using adbars (e.g. AdSense) to display context-sensitive advertising for products on the site
- Virtual currency that offers advertising views in exchange for a handout of virtual currency in a game or other virtual platform.
- File-Sharing: Web sites that host directories of music, movies,
games and other software. Users upload content to file-hosting sites,
and then post descriptions of the material and their download links on
directory sites. Uploaders are paid by the file-hosting sites based on
the number of times their files are downloaded. The file-hosting sites
sell premium download access to the files to the general public. The web
sites that host the directory services sell advertising and do not host
the files themselves.
Publisher recruitment
Affiliate networks that already have several advertisers typically
also have a large pool of publishers.
These publishers could be
potentially recruited, and there is also an increased chance that
publishers in the network apply to the program on their own, without the
need for recruitment efforts by the advertiser.
Relevant websites that attract the same target audiences as the
advertiser but without competing with it are potential affiliate
partners as well.
Vendors or existing customers can also become recruits
if doing so makes sense and does not violate any laws or regulations
(such as with
pyramid schemes).
Almost any website could be recruited as an affiliate publisher, but
high-traffic websites are more likely interested in (for their own sake)
low-risk cost per mille or medium-risk cost per click deals rather than
higher-risk cost per action or revenue share deals.
[24]
Locating affiliate programs
There are three primary ways to locate affiliate programs for a target website:
- Affiliate program directories,
- Large affiliate networks that provide the platform for dozens or even hundreds of advertisers, and
- The target website itself. (Websites that offer an affiliate program
often have a link titled "affiliate program", "affiliates", "referral
program", or "webmasters"—usually in the footer or "About" section of
the website.)
If the above locations do not yield information pertaining to
affiliates, it may be the case that there exists a non-public affiliate
program.
Utilizing one of the common
website correlation
methods may provide clues about the affiliate network. The most
definitive method for finding this information is to contact the website
owner directly, if a contact method can be located.
Past and current issues
Since the emergence of affiliate marketing, there has been little
control over affiliate activity. Unscrupulous affiliates have used
spam, false advertising, forced clicks (to get tracking
cookies set on users' computers),
adware, and other methods to drive traffic to their sponsors.
Although many affiliate programs have
terms of service that contain rules against spam, this marketing method has historically proven to attract abuse from spammers.
E-mail spam
In the infancy of affiliate marketing, many Internet users held
negative opinions due to the tendency of affiliates to use spam to
promote the programs in which they were enrolled.
[25]
As affiliate marketing matured, many affiliate merchants have refined
their terms and conditions to prohibit affiliates from spamming.
Search engine spam
As search engines have become more prominent, some affiliate
marketers have shifted from sending e-mail spam to creating
automatically generated webpages that often contain product
data feeds
provided by merchants.
The goal of such webpages is to manipulate the
relevancy or prominence of resources indexed by a search engine, also
known as
spamdexing.
Each page can be targeted to a different niche market through the use
of specific keywords, with the result being a skewed form of search
engine optimization.
Spam is the biggest threat to organic search engines, whose goal is
to provide quality search results for keywords or phrases entered by
their users.
Google's
PageRank
algorithm update ("BigDaddy") in February 2006—the final stage of
Google's major update ("Jagger") that began in mid-summer
2005—specifically targeted spamdexing with great success.
This update
thus enabled Google to remove a large amount of mostly
computer-generated duplicate content from its index.
[26]
Websites consisting mostly of affiliate links have previously held a
negative reputation for underdelivering quality content.
In 2005 there
were active changes made by Google, where certain websites were labeled
as "thin affiliates".
[27]
Such websites were either removed from Google's index or were relocated
within the results page (i.e., moved from the top-most results to a
lower position).
To avoid this categorization, affiliate marketer
webmasters must create quality content on their websites that
distinguishes their work from the work of spammers or
banner farms, which only contain links leading to merchant sites.
Some commentators originally suggested that affiliate links work best
in the context of the information contained within the website itself.
For instance, if a website contains information pertaining to publishing
a website, an affiliate link leading to a merchant's
internet service provider
(ISP) within that website's content would be appropriate.
If a website
contains information pertaining to sports, an affiliate link leading to a
sporting goods website may work well within the context of the articles
and information about sports.
The goal in this case is to publish
quality information within the website and provide context-oriented
links to related merchant's websites.
However, more recent examples exist of "thin" affiliate sites that
are using the affiliate marketing model to create value for Consumers by
offering them a service. These thin content service Affiliate fall into
three categories:
- Price comparison
- Cause related marketing
- Time saving
Consumer countermeasures
The implementation of affiliate marketing on the internet relies
heavily on various techniques built into the design of many web-pages
and web-sites, and the use of calls to external domains to track user
actions (click tracking, Ad Sense) and to serve up content (advertising)
to the user.
Most of this activity adds time
[citation needed] and is generally a nuisance to the casual web-surfer and is seen as visual clutter.
[citation needed]
Various countermeasures have evolved over time to prevent or eliminate
the appearance of advertising when a web-page is rendered.
Third party
programs (
Ad-Aware,
Adblock Plus,
Spybot,
pop-up blockers,
etc.) and particularly, the use of a comprehensive HOSTS file can
effectively eliminate the visual clutter and the extra time and
bandwidth needed to render many web pages.
The use of specific entries
in the HOSTS file to block these well-known and persistent marketing and
click-tracking domains can also aid in reducing a system's exposure to
malware by preventing the content of infected advertising or tracking
servers to reach a user's web-browser.
[citation needed]
Adware
Although it differs from
spyware,
adware
often uses the same methods and technologies. Merchants initially were
uninformed about adware, what impact it had, and how it could damage
their brands.
Affiliate marketers became aware of the issue much more
quickly, especially because they noticed that adware often overwrites
tracking cookies, thus resulting in a decline of commissions. Affiliates
not employing adware felt that it was stealing commission from them.
Adware often has no valuable purpose and rarely provides any useful
content to the user, who is typically unaware that such software is
installed on his/her computer.
Affiliates discussed the issues in Internet forums and began to
organize their efforts. They believed that the best way to address the
problem was to discourage merchants from advertising via adware.
Merchants that were either indifferent to or supportive of adware were
exposed by affiliates, thus damaging those merchants' reputations and
tarnishing their affiliate marketing efforts. Many affiliates either
terminated the use of such merchants or switched to a competitor's
affiliate program.
Eventually, affiliate networks were also forced by
merchants and affiliates to take a stand and ban certain adware
publishers from their network.
The result was
Code of Conduct by
Commission Junction/beFree and
Performics,
[28] LinkShare's Anti-Predatory Advertising Addendum,
[29] and
ShareASale's complete ban of software applications as a medium for affiliates to promote advertiser offers.
[30]
Regardless of the progress made, adware continues to be an issue, as demonstrated by the
class action lawsuit against
ValueClick and its daughter company Commission Junction filed on April 20, 2007.
[31]
Trademark bidding
Affiliates were among the earliest adopters of pay per click
advertising when the first pay-per-click search engines emerged during
the end of the 1990s.
Later in 2000
Google launched its pay per click service,
Google AdWords,
which is responsible for the widespread use and acceptance of pay per
click as an advertising channel.
An increasing number of merchants
engaged in pay per click advertising, either directly or via a search
marketing agency, and realized that this space was already occupied by
their affiliates.
Although this situation alone created advertising
channel conflicts and debates between advertisers and affiliates, the
largest issue concerned affiliates bidding on advertisers names, brands,
and trademarks.
[32]
Several advertisers began to adjust their affiliate program terms to
prohibit their affiliates from bidding on those type of keywords. Some
advertisers, however, did and still do embrace this behavior, going so
far as to allow, or even encourage, affiliates to bid on any term,
including the advertiser's trademarks.
Compensation disclosure
Bloggers and other publishers may not be aware of disclosure guidelines set forth by the
FTC. Guidelines affect celebrity endorsements, advertising language, and blogger compensation.
[33]
Lack of industry standards
Certification and training
Affiliate marketing currently lacks industry standards for training
and certification. There are some training courses and seminars that
result in certifications; however, the acceptance of such certifications
is mostly due to the reputation of the individual or company issuing
the certification.
Affiliate marketing is not commonly taught in
universities, and only a few college instructors work with Internet
marketers to introduce the subject to students majoring in marketing.
[34]
Education occurs most often in "real life" by becoming involved and
learning the details as time progresses.
Although there are several
books on the topic, some so-called "how-to" or "
silver bullet" books instruct readers to manipulate holes in the Google
algorithm, which can quickly become out of date,
[34] or suggest strategies no longer endorsed or permitted by advertisers.
[35]
Outsourced Program Management companies typically combine formal and
informal training, providing much of their training through group
collaboration and
brainstorming.
Such companies also try to send each marketing employee to the industry conference of their choice.
[36]
Other training resources used include online forums, weblogs,
podcasts, video seminars, and specialty websites.
Code of conduct
A code of conduct was released by affiliate networks
Commission Junction/
beFree and
Performics in December 2002 to guide practices and adherence to ethical standards for online advertising.
Marketing term
Members of the marketing industry are recommending that "affiliate marketing" be substituted with an alternative name.
[37]
Affiliate marketing is often confused with either network marketing or multi-level marketing.
Performance marketing is a common alternative, but other recommendations have been made as well.
[citation needed]
Sales tax vulnerability
In April 2008 the State of
New York inserted an item in the state budget asserting
sales tax jurisdiction over
Amazon.com sales to residents of New York, based on the existence of affiliate links from New York–based websites to Amazon.
[38]
The state asserts that even one such affiliate constitutes Amazon
having a business presence in the state, and is sufficient to allow New
York to tax all Amazon sales to state residents.
Amazon challenged the
amendment and lost at the trial level in January, 2009. The case is
currently making its way through the New York appeals courts.
Cookie stuffing
Cookie stuffing involves placing an affiliate tracking
cookie
on a website visitor's computer without their knowledge, which will
then generate revenue for the person doing the cookie stuffing.
This not
only generates fraudulent affiliate sales, but also has the potential
to overwrite other affiliates' cookies, essentially stealing their
legitimately earned commissions.
Click to reveal
Many
voucher code
web sites use a click-to-reveal format, which requires the web site
user to click to reveal the voucher code. The action of clicking places
the
cookie on the website visitor's computer.
In the United Kingdom, the IAB Affiliate Council regulations
[39]
have stated that "Affiliates must not use a mechanism whereby users are
encouraged to click to interact with content where it is unclear or
confusing what the outcome will be."
See also
- Affiliate tracking software
- Internet advertising: E-mail spam, e-mail marketing, post-click marketing, Website monetizing
- Advertising methods: Ad filtering, ad serving, central ad server, pop-up ad, contextual advertising, web banner
- Marketing tactics: Guerilla marketing, marketing strategy, evangelism marketing, viral marketing, word of mouth marketing
- Search engines: Search engine marketing (SEM), search engine optimization (SEO), pay per click, click fraud, paid inclusion
- Industry calculations: Click through rate (CTR), cost per action (CPA), cost per click (CPC), cost per impression (CPI), cost per mille (CPM), effective cost per mille (eCPM)
Source: Wikipedia.org
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