What exactly is an affiliate program? While the particulars change based on who is offering it and how it operates, the basic definition is the same: An affiliate program is a revenue-sharing plan that uses the Internet to facilitate partnered selling.
eMarketer says that affiliate marketing is “widely regarded as the next evolutionary step in online advertising.” And with banner advertising response rates falling precipitously, this could well be the case.
The affiliate concept is so uncomplicated and easy for both parties that it is possible for everyone to be a winner. There is little risk on the part of either the affiliate program sponsor or the affiliate. Setting up links is technically simple and inexpensive, and the very nature of the web makes these links easily traceable.
An affiliate can be as aggressive or passive as desired in promoting the sponsor’s products. In some cases, the affiliate’s primary objective may be to enhance a web site’s service component, so the additional income from the program is just an added benefit. Other affiliates may be looking for a fast, easy way to get into e-commerce.
From the site visitor’s perspective, an affiliate program is an added benefit. The visitor can now purchase products or services from your site. If those products and services are relevant to your site’s topic area, then the visitor’s experience is enhanced.
Business-to-Business Affiliate Programs
Most affiliate programs can be adapted to meet the needs of the business-to-business marketer.
Suppose you are a marketer of financial services targeted to businesses. If you were part of the Amazon.com Associates program, or another Internet bookseller’s program, you could select appropriate books in the financial category and sell them on your web site. You are providing your site visitors with a service and gaining additional revenue at no cost. It really is that simple to make money with the affiliate program model.
The same principle applies to other affiliate programs, from products to services to auctions. It is all in how you apply the affiliate program to your own specialized business-to-business marketing needs.
Second only to Amazon.com in terms of e-commerce leadership is Dell Computer. Dell announced its first-ever affiliate marketing program in March 1999. With 50 charter members, the Dell program relies on LinkShare, the largest affiliate network, to bring its products to more than 65,000 affiliate sites. LinkShare technology will track and monitor all Dell sales through affiliates. According to Dell, affiliate marketing is expected to significantly contribute to the company’s goal of 50 percent of sales via e-commerce by the end of 2000.
Tips On Becoming An Affiliate
In most cases, becoming an affiliate is as uncomplicated as signing up and linking to the affiliate sponsor’s site. But there are a number of key considerations.
- Choose affiliate programs carefully.
There are hundreds, if not thousands, of affiliate programs available. Start by doing a survey of these programs to determine which best fit your site.
Two of the best places to look are Associate-It, which claims to be the “Web’s biggest directory of Associate Programs,” and Refer-It. These two sites do an excellent job of providing both general information and search engines for locating affiliate programs.
Between the two sites, you will find well over 1,000 affiliate programs to review. Pick several that appeal to you and then read the terms of every affiliate program very carefully. They are not all the same. Be sure to understand the commitment required by the sponsor, and whether or not you will have to pay anything up front to participate.
- Verify the legitimacy of the programs you are considering.
Do not assume that an affiliate program or its sponsor is legitimate just because you find it in a directory. If you are familiar with the name and the reputation of the company, there is probably little cause for concern. However, many affiliate program sponsors could be companies you’ve never heard of before. This does not mean they are not legitimate, but do your homework.
Make sure you are comfortable with the types of products the sponsoring company offers. Find out how long the sponsor’s affiliate program has been in existence and how many affiliates are involved. Ask for references and check them out. Try to learn if there have been any complaints about the company by checking them out with local Better Business Bureaus or other such organizations operating on the Internet.
It may even be worthwhile to go to a few of the sponsor’s affiliate sites and order product through them to see how the sponsor handles your order. Determine if you can try the program for a limited period of time without obligation. This is a serious business decision. Make sure you are affiliating with a company that will not damage your own reputation.
- Select programs that meet your web site visitors’ needs.
Narrow down your selection to a few affiliate programs you feel best fit your site. Typically, your affiliate program will be more successful if the sponsor’s products or services are complementary to your own.
As in the earlier example of selecting specific books from Amazon.com that might be of interest to a site visitor, you should think about drawing a relationship between the sponsor’s offerings and your site. Why do visitors come to your site, and what are they looking for? If the sponsor’s affiliate program helps to answer these questions and supports the theme of your site or the business you are in, then it is probably a good fit.
- Test one program.
You will probably be tempted to add several affiliate programs to your site. If you are new to affiliate marketing, however, you may want to approach it conservatively and test one program first.
It is important to understand how affiliate marketing works and to see if your visitors will be receptive to it. You also need to make a commitment to the affiliate program, promoting it on your site and keeping the information relating to the program fresh.
- Continuously evaluate the program… and add other programs selectively.
Keep a close eye on how well the affiliate program is working. Evaluate the sponsor’s service and make sure your visitors are satisfied. Determine if you are getting what you anticipated out of the program.
Once you are comfortable with the concept of affiliate marketing, you can consider adding other programs to your site. But do so selectively.
Typically, it is not productive to add multiple affiliate programs in the same category. Make a commitment to one bookseller, or one computer products vendor. Otherwise, you may be offering your visitors too many choices and that could dilute overall ordering from your site. Affiliate programs should enhance your site, not take away from its effectiveness. If you fill your site with too many affiliate programs, your visitors may perceive that you are more interested in making money than servicing their needs.