2. What is Affiliate Marketing?
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
• Merchants look to earn revenue from sale of their products or
services, pay affiliates (publishers) who want to earn revenue
from placement of product banners or text links on their site.
• Merchants only pay affiliate partners for results, such as a lead
or a purchase “pay-for-performance” or other performance
criteria.
3. Who are the Key Players?
There are three key players in any affiliate program:
1. The Merchant (Advertiser)
2. The Affiliate (Publisher)
3. The Affiliate Network
Web Publishers that
post ads for merchant
A Company that finds
affiliates for merchant
4. Who is a Merchant
A company/organization who wants to sell their product/services.
5. What is An Affiliate Network?
An Affiliate Network is a third party that acts as liaison between
Affiliates and Merchants
• Allows Affiliates to find Merchants which are suitable for their site
• Allows Merchants to find Affiliate sites that expands reach to their
target audience
• Services include tracking technology, reporting tools, payment
aggregation and processing
• Provides a creative bank or repository for storing and accessing
creative assets
• Is no cost for an Affiliate to join
6. How Does Affiliate Marketing Works?
1. Affiliate obtains Merchant creative from Affiliate Network
and loads to their site
2. Consumer visits Affiliate’s site and clicks Merchant banner
3. Cookie is set on Consumer’s browser which identifies
Merchant, Affiliate and link
4. Consumer is directed to Merchant site
5. Affiliate ID is captured by Merchant in referring URL
6. Consumer makes purchase from Merchant
7. Cookie information sent to Affiliate Network
8. Merchant transmits sales file to Affiliate Network which
includes Affiliate ID
9. Affiliate Network tracks sales transactions with Affiliate ID
and pays Affiliate
8. Affiliate Program Models
• CPC – Cost per click – The affiliate is paid for every click which
he/she generate
• CPA – Cost per acquisition – The affiliate is paid a fixed amount for
every conversion which he/she generate
• CPS – Cost per sale – The affiliate is paid a certain amount of
transaction value for every transaction which he/she generate
• CPL – Cost per lead – The affiliate is paid a fixed amount for every
filled up query form
• CPM – Cost per mille (a.k.a. Cost per thousand impression) – The
affiliate is paid for every thousand impression which he/she serve
on their website/blog
• CPO – Cost per open – The affiliate is paid for every mailer opened
• CPV – Cost per Visit – The affiliate is paid for every visit/session
they generate for a website
11. Shopping – site are virtual malls. The consumer shops for various
brands and products on site. These sites are not driven by particular
coupon or deal offer
12. Coupon/Deal – most popular affiliate model. These sites are shopping
sites that require merchant to provide consumer with either a coupon,
percent off savings, or free shipping offer
13. Comparison Shopping – sites sell items using a comparison model.
These sites usually require a data feed of merchants’ products.
14. Content – sites are usually not shopping sites. Consumers go to sites
because the content is of particular interest. Sites to particular
product contained in site
15. Search – affiliates promote merchants via search engine marketing,
using either natural or paid search practices.
16. Blogs/Forums – sites post or feature article that focus on a
particular product or merchant and include an product affiliate link
to the product.
