Affiliate Marketing 101 – Part 1

posted by admin on August 9, 2010 at 6:44 am0 Comments

So, many of you may be asking, what is affiliate marketing? There are two responses to this question. One is very simple, and one is very complex. So lets start with the simple response:

Affiliate marketing is the process in which an advertiser/merchant (company or person with a product or offer) pays affiliates/publishers either a percentage of a sale, or a predetermined amount for a lead or action. From the standpoint of an advertiser, they can produce additional sales, without doing any additional marketing of their product! So basically, they make additional revenue for free by simply giving a piece of the profits to an affiliate to sell their product/promote their service for them.

The more complex response includes the various marketing techniques involved with affiliate marketing. So lets start with some basic terms and definitions.

1) Cost-Per-Sale (CPS) –> Cost per sale is simply the amount an affiliate will be paid by the advertiser/affiliate network for generating a sale.

2) Cost-Per-Lead (CPL) –> Cost per lead, similar to cost per sale, is the amount an affiliate will be paid by the advertiser/network for generating a lead towards the advertisers offer/service.

3) Cost-Per-Click Advertising (CPC/PPC) –> CPC or PPC (pay-per-click) advertising can be extremely profitable if done properly. With CPC/PPC, you will set up a campaign with companies such as Google Adwords, Facebook ads, etc. and you simply pay for every click that comes through your advertisement (to your landing page or directly to the offer — which would be known as direct PPC). With CPC platforms, you often have to place a bid on clicks (you’re bidding against others for the same keywords/niches). The higher your bid, the more exposure your ad will have, but also the more expensive it will be, and often times the less profitable your campaign will be. The best PPC campaigns are those that you make large profits with low-cost clicks, but it certainly is not easy finding these keywords/niches!

4) Cost-Per-Thousand-Impressions (CPM) –> CPM advertising is similar to PPC/CPC advertising, except you’re not paying per click. Instead, you pay per 1,000 impressions to your advertisement. If you set your CPM bid to .05 for example, you will pay .05 for every 1,000 views of your advertisement. If you have an excellent ad that entices users to click through to your landing page or directly to the offer, CPM advertising can be extremely effective for you, and extremely profitable. If your ad is not very enticing, CPM advertising can be very costly and unprofitable. It’s certainly always best to run a CPC/PPC campaign before running a CPM campaign, as it will give you an idea of how high a click-through rate your ad has!

5) Cost-Per-Action (CPA) –> The term CPA (not to be confused with certified public accountant) basically means cost per any particular action that a person must do. This can be completing a lead form, generating a sale, producing clicks, etc. Any action that can be paid for online can be turned into a CPA offer!

I will be posting several parts to this Affiliate Marketing 101 ‘course’. I hope that if you’re learning about affiliate marketing, these can serve as a free resource for you!

Article posted in "Affiliate MarketingMarketing Techniques / Advice" |

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