The concept behind affiliate marketing may be simple, but the advertising technique has its ups and downs.
Affiliate marketing, also known as referral marketing, is a form of Internet advertising in which advertisers (online merchants that sell products or services) pay affiliates (independent parties that promote the advertiser on their website through a link) only for results, such as a visitor who makes a purchase or fills out a form. If the concept works properly, the advertiser pays commissions to website owner/operators who are able to successfully sell products or services—a sort of “pay for performance” model.
There are a number of reasons why web marketers widely use affiliate marketing as a form of Internet advertising.
Affiliate marketing is low-cost
Many owner/operators are fearful of starting a home-based business because of the high startup capital required. Affiliate marketing doesn’t involve much investment to start bringing in money.
Affiliate marketing involves no inventory
Managing product can be stressful and time-consuming. With affiliate marketing, there is no inventory to be maintained; the merchant takes care of all that.
Referral marketing offers unlimited income
A regular job means showing up to get paid. Income is tied to attendance and performance. Through referral marketing, associates lead traffic to a website owner/operator’s site without having to lift a finger after ad copy and links are provided. Not every web marketer earns unlimited income, but everything’s already there for the advertiser or Internet marketer to be a success.
Referral marketing means going global
There’s a global marketplace to be had with referral marketing. Choose the right nice product, prepare and make available all the necessary tools, and affiliates can send traffic from just about anywhere in the world to a website owner/operator’s URL (Universal Resource Location).
Referral marketing is low-risk
One of the biggest reasons why Internet marketers get excited about referral marketing is a low-risk/high-reward factor. Many website owner/operators only have small budgets set aside for advertising. As a result, referral marketing is an attractive option that offers the most traffic for a limited buck.
Referral marketing has no set hours
There is no closing time for a website owner/operator who uses referral marketing. In other words, a business is operating every second of every day while targeting that global marketplace traffic.
One final warning, though: affiliate marketing would be a waste of time without the right niche product and all the other proper tools of preparation. For example, without the proper search engine optimization, affiliate marketing does little good. Since few customers will notice, the result will be poor traffic and productivity. For best results, be sure to carefully weigh the inexpensive vs. costly Internet ad methods.
* Originally published on Suite 101 October 08, 2010
