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Affiliate Marketing
A Merchant, also known as an advertiser or retailer, is a web
site or company that sells a product or service online, accepts payments and
fulfills orders generated through Publishers. Merchants partner with
publishers to help promote their products and services.
Affiliate, also known as reseller or publisher, is an independent party
that promotes products and services of an online Merchant by placing Merchant's ad banners or text links on their Web site,
blogs, etc. or include them in e-mail campaigns and search
listings in exchange for commissions on leads or sales.
Affiliate Marketing is also known as Advertising, Performance
Based Marketing or Associate Program. In an affiliate marketing
program, a publisher receives a commission for generating a
transaction, such as a lead or sale, for an advertiser that
the publisher is promoting.
The advertiser assigns a
commission for each action it wants to accomplish. Publishers
place the tracking code for these ad banners or text links on
their Web sites, blogs,
etc. or include them in e-mail campaigns and search listings. Whenever a visitor to the publishers website uses these
links and goes to advertiser's site, that transaction is tracked online. When
the visitor from publishers website takes a specific action such as filling
out a form, subscribing to a service (both lead examples) or making a purchase
(a sale) from
the Merchant, the publisher is paid a commission for that transaction.
There are basically three payment
structures to consider for an affiliate program Pay Per
Click, Pay Per Lead and Pay Per Sale.
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Pay Per Sale
Also called revenue sharing, a Per Sale commission
offers affiliates a fixed percentage of a sale when a
referred visitor actually makes a purchase. Such
commissions, which are tracked by Post Affiliate Pro via
cookies, IP tracking, or PHP sessions, generally range
between 5%-60%.
Pay Per Click
Pay Per Click (PPC), Cost Per Click (CPC) or Click-Through refers to the
commission affiliates receive every time a visitor clicks through to Advertisers
website via a banner or link. Per Click Commission are usually quite low, since
the clicks by potential customers do not always result in a sale. Depending on
an affiliate's click-through-ratio (CTR), commissions generally range
between $0.01 and $1.00. Click-through ratio is the
percentage of clicks for the number of advertising impressions displayed. An
impression is the viewing of an advertising banner, link, or product on the
Internet
Pay Per Lead or Action
Per Lead commissions
reward affiliates for specific action by the visitor
from publishers website, such as filling out a form or
subscribing to a service. Per Lead
is often used to reward affiliates for referring new
affiliates.
Sign-Up Referral Commission
Some merchants looking to add as many affiliates as
possible often use a tiered commission structure to
reward existing affiliates. In this program an
affiliate gets a small percentage as commission for
every sale
generated by a new affiliate referred by him.
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