Chapter 11

Affiliate Marketing 101

Depending on the version of history told, Amazon’s CEO Jeff Bezos was either the first, or one of the first, to develop the affiliate concept. One night, shortly after he started his new online business, Bezos was talking with a woman at a cocktail party about how she wanted to sell books on her Web site. He thought about the conversation and came up with the idea of linking the woman’s site to Amazon and giving her a commission on any book sales. It was through Amazon that the affiliate program became so widespread online.

The affiliate program has been of major benefit to online retailers ever since. As the Internet has continued its expansion, and growing numbers of worldwide consumers have gone online for their purchases, retailers have looked for a myriad of ways to grow their business, expand their name brand, and acquire new customers. Affiliate marketing, or known as the “Associate Program” on Amazon, has been this company’s thoroughbred race horse since the concept first began. In a short period of time, through its Associate Program, the company was able to spread its brand across thousands of Web sites. In February 1998, Amazon had already attracted more than 30,000 Associates in place of a minimal commission on sales. Now, that number stands at approximately one million.

Becoming an Associate with Amazon gives a business the opportunity to team up with one of the largest online retail companies with a very well-known brand name. It is an excellent way to drive people to a Web site and to offer additional product beyond what you are already selling. The search engines follow affiliates and will give them a good ranking. There is no cost for additional inventory. Amazon supplies the shopping cart, processes the orders and payments, ships the products, and handles returns. You get a commission on anything sold.

In brief, Internet merchants want additional business either in leads or sales, and they know they have to pay for them. With the affiliate network, both the merchant and the new Web site partners benefit. The merchant gets the additional business. In return, the affiliates have an opportunity to play a role in a much larger production. They do not need to invest a lot of money. They only need a very basic knowledge of Web site production, an interested in a specific product or service, and a basic understanding of the Internet.

Affiliates are independent online entities that agree to provide links to a merchant’s Web site. In this arrangement, affiliates receive a sales commission, percentage of each sale, and/or click-through to the merchant’s Web site. When affiliates sign up with a merchant, they get special links that are coded with a unique account number. These links are then placed on banner advertisements, buttons, text, or even turn-key stores on the affiliate’s Web page. The affiliates upload the Web pages to their server. When visitors click on a link, special software records the coded transaction.

If a visitor makes a purchase or fulfills a lead as a result of a referral, the affiliate’s account is credited with the appropriate amount. Payment terms vary from program to program. Cookies in affiliate marketing are used for persistently determining the affiliate’s entitlement to commission over a particular range of time. The cookie lifetime tracks the period of time that a cookie stays valid on a user’s personal computer. Given a set lifetime of 30 days, for example, the affiliate is allowed a commission for all leads and sales that take place up to 30 days after the customer’s initial click on the advertising link. Most merchants pay their affiliates monthly or quarterly once the affiliate has reached a predetermined balance in the account. Merchants provide affiliate account information via e-mail or private Web sites. Affiliate marketing can provide a steady flow of income based on impressions (how many visitors see the offer); click-throughs (the number of visitors who click on the offer); and leads/sales (the total of visitors who make a purchase and how much is made from each sale). The amount of traffic a Web site generates, or the number of visitors, is of utmost importance.

With affiliate marketing, important measurements include:

Learning the Work and Personal Skills Needed for Affiliate Marketing

Affiliate marketing relies on the same advertising methods as any other online business, such as search engine optimization (SEO), pay-per-click (PPC), display advertising, and e-mail marketing. Later chapters will more thoroughly cover these marketing tools. Each of these vehicles brings separate results and may have specific fees attached. SEO integrates keywords into your Web site. If customers are searching for the item your business is offering, this will increase the chance that they will find it easier and more quickly. PPC is an advertising method that allows you to set up your ad with keywords. Display ads integrate text, logos, photos, and video/audio media; this is done through either still or animated Web banners. E-mail ads are newsletters or updates sent to customers through electronic mail.

One successful method that affiliates use to boost traffic and sales is to concentrate on a small niche, that is, to pick a topic in conjunction with a product or service of considerable interest and build a Web site based on that theme. Next, they choose affiliates that align with the subject of their site and add these to the links in the text. By writing about the items from expert knowledge, the affiliate becomes a well-known, reliable source of material. The more a Web site attracts people who are interested in the topic, the greater the possibility they are going to purchase a product or service. In addition, the affiliates enjoy running their Web site, which will encourage them to put in more time. Overall, the whole process is quite simple: The site revolves around a topic that is of interest to both the affiliates and their visitors.

Beginners often believe that they just have to set up their Web site, submit their affiliate URL to the search engines, and they will be mobbed by visitors. They soon learn differently, as this is not the way that affiliates get large numbers of targeted visitors. Providing timely information that is of interest, that encourages users to come to the site and continually come back to read and learn more, has been proved time and time again to be an effective method. With a Web site that has up-to-date and valuable copy, affiliates are more likely to receive a good listing on the search engines, have a steady stream of targeted prospects, and promote their products and services. The relevancy of your Web site content to the product line is of utmost importance; you are not going to sell many motorcycle helmets to consumers who are looking for children’s toys.

By providing visitors with information of value, affiliates establish themselves as people who have the expertise in their subject area, while also building an ongoing connection. Always remember the power of establishing a relationship. You have a much better opportunity to sell to someone who has become familiar with your site and with whom you have established trust. It is therefore essential that affiliates regularly question how they are presenting themselves. Are they including articles that appear professional, knowledgeable, and helpful? Do they give examples on the ways that these products and services provide value? Do they use these products? How? There is no magic bullet online for getting easy money. Affiliate programs do provide a great deal of income to many associates — if they accept the responsibility to put in the effort.

In short, if you want to be a successful Amazon Associate, you need to:

Here are some mistakes that beginner affiliates often make:

With affiliate marketing, people all over the world leave their regular jobs and work at home as they please, just like many online ads promote. Yet, when the ads show the mansions, expensive cars, and beautiful beach vacation shots, there is something important that they do not tell you: All these people who have turned affiliate marketing into their “golden egg” have worked hard to do so. If you are looking for immediate, no-effort millions, affiliate marketing is not the answer. Yet, if you are ready to learn something new and exciting, and also invest consistent time and energy in return for good, steady income, affiliate marketing can meet your needs.

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