Affiliate marketing is the best thing that happened to the world. In my opinion, that is.

I love internet marketing and affiliate marketing. I think is a genius way to live the life of your dreams. More and more people are getting on board and we are just getting started despite how old this business model is.

A large number of newbie advertisers miss a trick when it comes to affiliate marketing – the deficiency of knowledge and understanding usually means that they don’t know where to begin.

There are certain benefits in starting and managing your own affiliate program, such as:

To increase your traffic and sales

To increase your brand awareness

Performance-based commission – only pay commission for the sales that are generated

Transparency – see the specific website traffic and sales that have been referred via your affiliate network

Hazard Free – Affiliate marketing gives you the opportunity to work with a wide range of sites and technology partners, varying your digital channel mix and key revenue sources.

So when you know the benefits, here is a brief sketch of exactly how affiliate marketing works.

How Does Affiliate Marketing Work?

Basically, affiliate marketing means a merchant paying a commission to other online entities, known as affiliates, for referring new business to the merchant's website. Affiliate marketing is a branch of performance-based marketing, which means affiliates only get paid when their promotional attempts actually result in a transaction.

What is an affiliate in Internet World? Definition and meaning

Affiliates come in many shapes and forms, but the most popular categories of affiliates include Cashback, Discount Vouchers/Coupons, Content Marketing/Blogging, Price Comparison, Paid Search Partners and Onsite Conversion Partners. The affiliate can decide which advertisers to promote.

Cashback/Loyalty/Reward Websites: Cashback site is a simplistic idea. Instead of going straight to a shop, you access a retailer's online store through a link from a cashback website. You still receive your item directly from the retailer, but you also get some money from the cashback website. It is often a percentage of the total price you paid. They offer their users cashback or points to redeem on a future purchase. A good example of this is TopCashBack. They offer their users points for purchases (often triple or 5x points). These points can be redeemed in-store or online.
Bonus: Go to, to make your own website.

Discount Voucher/Coupons Websites: Coupon websites are typically online advertising sites that use direct marketing to facilitate group-buying deals. They develop large customer databases by collecting the name, contact details and location of each person who purchases from them. They offer their users discounts on purchases. Groupon is a great example of this.

Content Website/Blogging: Affiliate marketing is a way for a blogger or anyone involved in online marketing to make money by promoting products and services in exchange for a commission from the sales or leads they drive. This is usually accomplished when a merchant or web advertiser places a banner ad, button, or link to affiliate's website. Content sites have banners and can also choose to write content on their site to get people to buy. A great example of this is SheShopped.

Paid search: There are specialised affiliates that conduct pay per click activity via search engines such as Google and Bing outlaying the cost and being remunerated on a CPA basis. The advantage to the client can be a specialised affiliate working on a CPA basis where the advertiser would normally have the upfront cost of cost per click.

Onsite conversion: Includes techniques such as email remarketing, display retargeting and onsite overlays. These affiliates greatly assist the advertiser to gain sales by increasing conversions.

All these affiliates have different methods of promotion, and they are not all limited to just one promotion method. For example, they may have an e-mail database, extra homepage positions for their best advertisers, or a page dedicated to your brand.

It is always a good idea to ask your prospective affiliate partner for a ‘media deck’ if you are looking to do some extra promotion with them.

How do affiliates get paid?

There are several ways you can choose to pay your affiliates.

Percentage per sale is the most popular payment method – this is where you pay a percentage of the total sale value (excluding shipping). This is called CPA, or cost per acquisition.

For example, if you decided that you wanted to give your affiliates 10% commission, and one of your affiliates created a sale worth £100, they would get £10 from you.

Other methods of rewarding affiliates include:

£ Per sale – this is a set GBP amount per sale, regardless of the amount

£ Per install – if you have an app, and you want to pay your affiliates every time someone installs the software

£ Per lead – This means you would pay your affiliate based on someone entering their details into your website (subject to validation of those leads)

£ Per signup – a set GBP amount for every registration.

The method which you reward your affiliates are set by you and should fit within your margins and works best for your brand.

What is the role of an affiliate network?

An affiliate network acts as an intermediary between you and your affiliates. Your network has several roles:

1. Technology: Affiliate network management platforms provide robust and transparent third-party tracking and reporting.

2. An interface: for viewing the programs, reports and affiliates.

3. A network of affiliates: MoneySavingExpert has thousands of affiliates on the network that advertisers can work with.

4. Advice & guidance on affiliate best practice.

5. Support for affiliates and advertisers.

6. Hosting and serving your ads.

Some affiliate networks even offer affiliate program management, which means they will manage your program for you to ensure growth. Alternatively, you can choose to manage your network yourself if you have the resources and time available.

Affiliate marketing is low risk, high reward marketing channel; both for brands who are just starting out and for established household names as well. Unfortunately, in the United Kingdom, it’s still a channel that many brands are missing some big opportunities on.

Whether it is due to the perceived management complexity, a lack of awareness and education about the channel or just not knowing where to start, affiliate marketing presents a fantastic opportunity for Britain businesses that are ready to diversify their digital marketing channels and take their marketing mix to the next level. So keep your heads UP guys! Good Luck!

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