Affiliate marketing is a performance-based marketing strategy 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. Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC - Pay Per Click), e-mail marketing, content marketing, and (in some sense) display advertising.
An affiliate network acts as an intermediary between publishers (affiliates) and merchant affiliate programs. It allows website publishers to more easily find and participate in affiliate programs which are suitable for their website (and thus generate income from those programs), and allows websites offering affiliate programs (typically online merchants) to reach a larger audience by promoting their affiliate programs to all of the publishers participating in the affiliate network.
Traditional affiliate networks enable merchants to offer publishers a share of any revenue that is generated by the merchant from visitors to the publisher's site, or a fee for each visitor on the publisher's site that completes a specific action (making a purchase, registering for a newsletter, etc.). The majority of merchant programs have a revenue share model, as opposed to a fee-per-action model.
For merchants, affiliate network services provided often include reporting, tracking, payment and refund processing, affiliate management, and most importantly – access to a large base of publishers (affiliate marketers). For affiliate marketers, network services include a central database of available affiliate programs organized by category and popularity to choose from, a simple registration platform for those programs, reporting tools, analytics, and payment processing.
While affiliate marketers are generally able to join affiliate networks for free, merchants usually have to pay a fee to participate in the network. Affiliate networks usually charge an initial setup fee for each merchant and often a recurring membership fee. It’s also common practice for affiliate networks to charge merchants a percentage of the commissions paid to affiliates. This percentage is known as an ‘over-ride’ and is payable on top of the affiliates commissions.
Joining an affiliate network is an excellent way for publishers to generate income from their websites and for brands to increase their presence online. The fact that it’s free to join and that one can start earning money within minutes of signing up makes it quite attractive to join an affiliate network.
For merchants, they can drive traffic to their website and pay only for such traffic that results in a sale or a lead, thus, it is a cost effective way of marketing their products and services. The affiliate network provides a platform that allows merchants to find and recruit affiliates who have access to an audience that is suitable for marketing their products, services, or promotions.
There are two basic types of affiliate networks, with the main difference being their method of tracking and payment. The first type is known as a 'traditional' affiliate network and the second as a 'blind' network.
The traditional network design is generally more user-friendly and provides the most thorough and detailed tracking and payment method. Blind networks, on the other hand, are generally used by advertisers looking for a quick and easy way to get started with affiliate marketing without having to invest a lot of time in setting up, tracking and managing an affiliate program.
Traditional affiliate networks require an advertiser to deposit a set amount of money into their network's bank account before they can begin setting up their affiliate program. This deposit is used to pay the affiliates and the network's fees, and can be replenished as needed.
Once the deposit is made, the advertiser can set up their affiliate program by creating a set of rules and terms for affiliates to follow and by choosing the commission structure. The network then provides the advertiser with a unique tracking code, which they can place on their website or in their emails, to track the activity of their affiliates.
Blind networks are generally less user-friendly and do not provide the same level of tracking and payment detail as traditional networks. Instead, they provide a simple interface for advertisers to create and manage their affiliate programs, and a simple method for affiliates to track and receive their commissions.
Blind networks typically charge a flat fee for each click or sale that an affiliate generates, and do not require an advertiser to deposit a set amount of money into a network bank account. Instead, they require the advertiser to pay for each click or sale as it occurs.
Choosing the right affiliate network is crucial for a successful affiliate marketing strategy. Some considerations to keep in mind include the type of merchants seeking affiliates, the type of traffic the affiliate network can generate, how easy it is to use the platform, and the degree of customer support.
It's also important to consider the network's reputation, as a well-established network can provide a higher level of trust and service than a newer, less established network. Ultimately, the right affiliate network will depend on the specific needs and objectives of each individual merchant.
One of the most important factors in choosing an affiliate network is the network's reputation and level of trust. A well-established network with a long history of successful affiliate programs will have a higher level of trust among its affiliates and merchants.
It's also important to consider the network's reputation among its current and past affiliates. A network with a history of late payments, poor customer service, or other negative issues will likely have a poor reputation among its affiliates, which can make it difficult to recruit and retain quality affiliates.
The quality of merchants on an affiliate network is another important factor to consider. The best affiliate networks will have a wide variety of high-quality merchants for affiliates to choose from, which can help to increase the chances of a successful affiliate marketing program.
It's also important to consider the type of products or services offered by the merchants on the network. Affiliates will be more likely to join a network that offers products or services that are relevant to their audience, and less likely to join a network that offers products or services that are not relevant to their audience.
Affiliate networks play a crucial role in the affiliate marketing ecosystem. They provide a platform for merchants and affiliates to connect, track and manage their affiliate programs. The choice of an affiliate network can have a significant impact on the success of an affiliate marketing program.
Therefore, it's important for both merchants and affiliates to carefully consider their options and choose a network that best fits their needs and objectives. With the right affiliate network, both merchants and affiliates can benefit from a successful and profitable affiliate marketing program.