Posted in Marketing and Strategy Terms, Total Reads: 926
Affiliate is a performance- based marketing where the business rewards the affiliates who bring customers to visitors to the website through their marketing. The industry has 4 players who are erchant, networkers, publisher and customer. Nowadays there are other players too in the market like affiliate agencies who train the affiliates and recruit them, super- affiliates who are experienced and can bring in many visitors along with guiding the affiliates, specialized third party vendors who take care of the whole process for the company.
A similar kind of marketing is referral marketing where a third party is used to increase sales to the company. However, the main difference between them is that affiliate marketing expects the affiliates to convince customers to increase profit and sales while referral marketing is based on trust and relationships to increase sales.
Merchants prefer affiliate marketing because in most cases it is based on pay per click kind of metric which means the affiliates need to be paid if they are not showing results. Ie the affiliates are paid for what they do as commission other than the constant fixed salary.
There are many types of affiliate marketing websites which work based on different compensation plans. The different compensation plans includes predominant compensation like revenue sharing, diminished compensation methods like cost per click which has diminished in practice over period because of frauds and performance marketing like pay per sale.
The problem is that this will lead to a lot of spams in emails and search engine if the affiliates work in wrong way.