The Internet came as a pleasant surprise, shrinking global boundaries. Marketers joined the Internet bandwagon soon as they realized the immense potential from selling and marketing online. Every ecommerce business has strived to make a place for themselves by offering customized, valuable content and trying to focus on offering novel experiences to customers.

Where does affiliate marketing fit in this busy world of the Internet and ecommerce? You’ve probably heard this term being used often but don’t know what it means or how it works. Here, we will try and help with that.

Affiliate marketing can be defined as a kind of performance-linked marketing where ‘affiliates’ are rewarded for visits or purchases by customers brought by the affiliate. This concept essentially has 4 main entities involved:

1. The Merchant/Publisher: The merchant may be a business, an ecommerce player, a retailer or a brand. Someone who has products and services on offer and is looking at assistance from affiliates to help in gathering customers is a merchant. An affiliate is concerned with the promotion of his business and is willing to pay affiliates to do that.

2. The Network: The kind of offer or payment model that the affiliate chooses to work by is the network. Usually, ecommerce players design a variety of networks to suit different products and services.

3. The Affiliate: The entity that publishes the information to customers and brings them to the merchant is the affiliate. The affiliate can be a company or an individual and works for a commission.

4. The Customer: The consumer is the entity to attract whom the merchant and affiliate work in tandem. When a consumer views an advertisement pushed to him by an affiliate, clicks on a link that takes him to complete a survey or form and finally to the merchant site. At this instance, conversion takes place.

How Can You Measure Affiliate Marketing Success?

The success of an affiliate marketing arrangement can be determined by measuring some metrics like:

• Traffic to the site: How much traffic is your site getting? Higher the traffic on your site, higher the number of potential users. Higher traffic also helps in validating the fact that the content on your site is great.

• Conversion rate: This metric indicates the number of potential visitors performing the desired action on a site. This does not necessarily only mean buying a product. It could be filling a form, registering, subscribing or performing any other action on a site.

• Earnings: Earnings can mean two things. Firstly, the commission paid to the affiliate for bringing in business. Secondly, the gross sales that accrue to the merchant.

Some Examples Of Affiliate Marketing

To understand affiliate marketing better, let’s take a look at some practical examples:

Startups: For startups, gathering critical mass is probably the most important feat to be achieved. If an affiliate can promise a certain number of users, it can get paid per user referred. This creates traffic for the start-up and a monetary reward for the affiliate.

When the start-up is ready to go into the next stage, it may offer paid upgrades. Again, it may require an affiliate to help garner business.

Online Marketing: A company sells the latest trending fashion accessories and wants to gain the first mover advantage each time it launches something new. A fashion blogger works as an affiliate for the company and writes about the trending fashions with links to the company’s site. Consumer’s read the content, click on the link, reach the site and purchase some products.

Affiliate marketing cannot do what it is not meant to. So if a marketer thinks that affiliate marketing will perform all the roles of the marketing mix and distribution system that is incorrect. A merchant has to invest in advertisements; promotions and good customer service for affiliate marketing to work. For online businesses that are trying to make it big, affiliate marketing may be a good strategy to adopt.

Article Source: http://www.ivyclique.in/article/Marketing-&-Branding/New-To-Affiliate-Marketing-Gain-Some-Insights/NDQ5MQ==/MTU4