What is Affiliate Marketing?

In Affiliate Marketing, Marketing by Compass Creative TeamLeave a Comment

What is affiliate marketing?

Performance-based marketing where people affiliate themselves with a particular service or product and make money!

Affiliate Program

An Affiliate Program is a business arrangement whereby one party – the Merchant, agrees to pay another party – the Affiliate, for the referrals of Sales, Leads, Subscriptions or other qualified actions.  The payment is remitted for all the actions that occur when the end consumer clicks the affiliate link. This click leads to the Merchant’s website and results in an action that the advertiser desires, for example, an online sale.   There are a number of business models used in Affiliate marketing, but the two most frequently used are the “Paid For Sale” and the “Paid for Lead” models, which are self explanatory.  Payments are made to the affiliate on all confirmed and valid leads and orders.

Today market share of affiliate based sales is huge and still growing. Forrester Consulting estimates the US market to be worth $3.4 Billion in 2014, projecting it to reach $4.5 Billion by 2016.  There are over 10,000 online businesses which rely on affiliate marketing for some part of their revenue. In the UK, Price Water House Cooper reports that online Affiliate or Performance Marketing, with its over 4 billion clicks, translates into well over a 100 million transactions. These transactions result in sales and leads, making between 8 – 10% of online spending. That is 0.8% of the country’s GDP which, to put it in perspective, is almost the same amount as that earned by Agriculture.

Other Names for Affiliate Programs

Sometimes Affiliate Programs are called Associate, Reseller, Commission, Revenue sharing or Bounty Programs. Whatever the name used to describe this type of business, these are all online marketing programs.

If you want to get a website designed for Affiliate Marketing or you have a product for online sales, contact Compass Marketing today and we will review your needs and help plan your strategy so you too can begin to earn online.

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