Many people unfamiliar with performance-based marketing (also called affiliate marketing) are surprised at the number of sophisticated ways advertisers try to reach them. Most Internet surfers could identify a banner or text ad, but the majority could not tell you about affiliate marketing.
Performance-based marketing, also known as affiliate marketing or pay-for-performance marketing, is one channel of marketing products and services online. It traditionally includes an advertiser and a publisher, sometimes known as an affiliate (you!).
For our purposes, we define a publisher, as an independent party that promotes the products or services of an advertiser in exchange for a commission on leads or sales. A publisher displays ads, text links, or product links on its Web site, in email campaigns, or in search listings and is paid a commission by the advertiser when a visitor takes a specific action, such as filling out a form, making a purchase or subscribing to a service.
An advertiser, also known as a merchant or retailer, is a Web site or company that sells a product or service online, accepts payments and fulfills orders. You place an ad or link to the advertiser's products and/or services on your Web site and the advertiser pays you a commission for leads or sales that result from your site. Easy, right? Not exactly, but there are some tricks to the trade and success factors we see in our top publishers.
What it Takes to Succeed
Those publishers suited best for performance marketing have some consistent characteristics:
- A Web site designed for a specific niche of consumers or audience. While not all publishers have content sites, it is a simple way to enter into the pay-for-performance industry and a solid foundation to build upon if you later branch out to other marketing channels such as search engine marketing
- Basic HTML skills to be able to insert and track advertisements such as banners, buttons and links
- A set amount of time per day to dedicate to the program depending on number of Web sites
Do these characteristics describe you? If so, keep reading!
Learn the Language – Performance Marketing Speak
Just like in any industry, performance marketing has its own language. Don't be intimidated; pretty soon these terms will be second nature.
Application Service Provider (ASP ) – An ASP is an online network that is accessible through the Internet instead of through the installation of software. It is quickly integrated with other Web sites and the services are easily implemented and scalable.
Commission Payout – An amount of income received by a publisher for some quantifiable action such as selling an advertiser's product and/or service on the publisher's Web site.
Click-through - Also known as a click. The action a consumer takes when they are referred from a Web site through a link or advertisement and is taken to another Web site. Click-through ratio is the percentage of click for the number of advertising impressions displayed.
Cost per action (CPA)- A metric for online advertising where a rate is set for every action that is taken by an end-user.
Cost per thousand impressions (CPM)- A metric for online advertising where a rate is set for every thousand impressions.
Conversion rate- The percentage of visitors who take a desired action. The action that determines conversion is determined by the advertiser and may be a sale on the advertiser's Web site, a completed lead form, or another action.
Impression- The viewing of an advertising banner, link, or product.
Search Engine Marketing (SEM)- The act of marketing a Web site via search engines. This can be done by "natural" or "organic" search which refers to all unpaid search results based on relevance in the content site or "paid" search which refers to all pay-per-click advertising (such as on Google, Yahoo! or MSN).
Search Engine Optimization (SEO)- The process of increasing the amount of visitors to a Web site by ranking high in the search results of a search engine. Varied techniques are used by content site publishers to improve a Web page's results.
