Monday, February 18, 2008

How Are Affiliate Programs works?

Affiliate programs are pretty simple in concept, but a lot of behind-the-scenes work is necessary to make them work properly. In order for the affiliates to be compensated, someone needs to keep track of the actual activity surrounding the affiliate's link to the merchant site.

Depending on the arrangement, someone might need to determine: the number of people who click on the merchant site's link on an affiliate site
the number of people who end up buying something or performing some other predetermined action once the affiliate sends them to the merchant site. the number of people who see the merchant site's banner link on an affiliate site. Someone also has to keep track of the original arrangement between the merchant and the affiliate and make sure the affiliate receives whatever money is owed to them.

It's a lot of work for merchant Web sites to actively recruit affiliates, and for affiliates to search for affiliate programs they are interested in. Nonetheless, many companies, such as Amazon.com, deal with their affiliates directly because the administration is well worth their time. Even though they take full control over the process, and so determine themselves what they owe, these companies can attract a lot of affiliates because their offer has no real risk or cost: All an affiliate webmaster has to do is put the link up and hope the checks come rolling in. For a lot of Web sites, however, all the work of recruiting affiliates or merchant Web sites is just too time consuming. And a lot of webmasters would rather not
rely on the merchant site to tally their own bill correctly!

As we'll see in the next section, affiliate program networks offer an excellent solution to these problems.

Affiliate Program Networks:

Affiliate networks, or "affiliate brokers," act as mediators between affiliates and merchant Web sites with affiliate programs. They track all activity, arrange all payment, and help affiliates set up the necessary links on their Web site. Additionally, affiliate networks help recruit affiliates by including an online merchant's affiliate program in their directory. Different affiliate networks offer different extra features, but most have a help-center and a place affiliates and merchants can go to view reports of their traffic.
Affiliate networks are a real convenience for prospective affiliates because they present a wide variety of affiliate programs in one central location. They make it much easier to find a good program that is appropriate for your site.

The top three affiliate networks are:

Commission Junction

Be Free


Link Share

In return for the convenience they provide, affiliate networks take a cut of each transaction. Typically, a network takes somewhere around 20 percent of the commission.

Who Are Affiliate Programs For?

Most affiliate network service agreements prohibit offensive content, but generally speaking, any Web site could be involved in an affiliate program. Although they are commonly called merchants, Web sites don't even need to sell anything to benefit from having affiliates. A lot of content-based Web sites get most of their money from advertisers, which are attracted by high traffic numbers. Because of this, traffic translates directly into profit for these sites. Pay-per-click affiliate programs are an excellent way to increase traffic.

For example, We have an web site, we run an affiliate program through Commission Junction, but our affiliates don't help us sell anything. Instead, our affiliate sites run banner or text links to our sites to attract visitors who might be interested in our articles. This helps people who might be interested can find us more easily.

There are all sorts of affiliates, from top Web sites to small personal pages. Basically any Web site can join an affiliate program, and if they choose well, they can make some money off of it. Some sites, such as Memolink and MyPoints, are just big collections of affiliate programs. These sites join a variety of pay-per-click or pay-per-lead programs and then pay their visitors a fraction of the commission on each click or reward them with prizes.

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