Affiliate marketing
Encyclopedia
Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's own marketing efforts. Examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site.
The industry has four core players: the merchant (also known as 'retailer' or 'brand'), the network, the publisher (also known as 'the affiliate'), and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors
.
Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising
methods. Those methods include organic
search engine optimization
, paid search engine marketing
, e-mail marketing
, and in some sense display advertising
. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
Affiliate marketing—using one website to drive traffic
to another—is a form of online marketing, which is frequently overlooked by advertisers. While search engines, e-mail, and website syndication
capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers' marketing strategies
.
—paying commission
for referred business—predates affiliate marketing and the Internet. The translation of the revenue share principles to mainstream e-commerce
happened in November 1994, almost four years after the origination of the World Wide Web
.
Cybererotica was among the early innovators in affiliate marketing with a cost per click program.
During November 1994, CDNOW
launched its BuyWeb program. CDNOW had the idea that music-oriented websites could review or list albums on their pages that their visitors may be interested in purchasing. These websites could also offer a link that would take the visitor directly to CDNOW to purchase the albums. The idea for remote purchasing originally arose because of conversations with music label Geffen Records
in the fall of 1994. The management at Geffen wanted to sell its artists' CDs directly from its website, but did not want to implement this capability itself. Geffen asked CDNOW if it could design a program where CDNOW would handle the order fulfillment
. Geffen realized that CDNOW could link directly from the artist on its website to Geffen's website, bypassing the CDNOW home page and going directly to an artist's music page.
Amazon.com
(Amazon) launched its associate program in July 1996: Amazon associates could place banner
or text links on their site for individual books, or link directly to the Amazon home page.
When visitors clicked from the associate's website through to Amazon and purchased a book, the associate received a commission. Amazon was not the first merchant to offer an affiliate program, but its program was the first to become widely known and serve as a model for subsequent programs.
In February 2000, Amazon announced that it had been granted a patent
on components of an affiliate program. The patent application was submitted in June 1997, which predates most affiliate programs, but not PC Flowers & Gifts.com (October 1994), AutoWeb.com (October 1995), Kbkids.com/BrainPlay.com (January 1996), EPage (April 1996), and several others.
website, viewed as a marketing toy in the early days of the Internet, became an integrated part of the overall business plan and in some cases grew to a bigger business than the existing offline business. According to one report, the total sales amount generated through affiliate networks in 2006 was £2.16 billion in the United Kingdom
alone. The estimates were £1.35 billion in sales in 2005. MarketingSherpa's research team estimated that, in 2006, affiliates worldwide earned US$6.5 billion in bounty and commissions from a variety of sources in retail, personal finance, gaming and gambling, travel, telecom
, education, publishing, and forms of lead
generation other than contextual advertising
programs.
Currently the most active sectors for affiliate marketing are the adult, gambling, retail industries and file-sharing services. The three sectors expected to experience the greatest growth are the mobile phone
, finance, and travel sectors. Soon after these sectors came the entertainment (particularly gaming) and Internet-related services (particularly broadband
) sectors. Also several of the affiliate solution providers expect to see increased interest from business-to-business
marketers and advertisers in using affiliate marketing as part of their mix.
concepts—blogging and interactive online communities
, for example—have impacted the affiliate marketing world as well. The new media allowed merchants to become closer to their affiliates and improved the communication between them.
or pay per sale
(PPS) as a compensation method, nineteen percent use cost per action
(CPA), and the remaining programs use other methods such as cost per click (CPC) or cost per mille
(CPM).
and paid search.
Cost per mille requires only that the publisher make the advertising available on his website and display it to his visitors in order to receive a commission. Pay per click requires one additional step in the conversion process to generate revenue for the publisher: A visitor must not only be made aware of the advertisement, but must also click on the advertisement to visit the advertiser's website.
Cost per click was more common in the early days of affiliate marketing, but has diminished in use over time due to click fraud
issues very similar to the click fraud issues modern search engines are facing today. Contextual advertising programs are not considered in the statistic pertaining to diminished use of cost per click, as it is uncertain if contextual advertising can be considered affiliate marketing.
While these models have diminished in mature e-commerce and online advertising markets they are still prevalent in some more nascent industries. China is one example where Affiliate Marketing does not overtly resemble the same model in the West. With many affiliates being paid a flat "Cost Per Day" with some networks offering Cost Per Click or CPM.
/click, the publisher is not concerned about a visitor being a member of the audience that the advertiser tries to attract and is able to convert, because at this point the publisher has already earned his commission. This leaves the greater, and, in case of cost per mille, the full risk and loss (if the visitor can not be converted) to the advertiser.
Cost per action/sale methods require that referred visitors do more than visit the advertiser's website before the affiliate receives commission. The advertiser must convert that visitor first. It is in the best interest for the affiliate to send the most closely targeted traffic to the advertiser as possible to increase the chance of a conversion. The risk and loss is shared between the affiliate and the advertiser.
Affiliate marketing is also called "performance marketing", in reference to how sales employees are typically being compensated. Such employees are typically paid a commission for each sale they close, and sometimes are paid performance incentives for exceeding targeted baselines. Affiliates are not employed by the advertiser whose products or services they promote, but the compensation models applied to affiliate marketing are very similar to the ones used for people in the advertisers' internal sales department.
The phrase, "Affiliates are an extended sales force for your business", which is often used to explain affiliate marketing, is not completely accurate. The primary difference between the two is that affiliate marketers provide little if any influence on a possible prospect in the conversion process once that prospect is directed to the advertiser's website. The sales team of the advertiser, however, does have the control and influence up to the point where the prospect signs the contract or completes the purchase.
Two-tier programs exist in the minority of affiliate programs; most are simply one-tier. Referral programs beyond two-tier resemble multi-level marketing
(MLM) or network marketing but are different: Multi-level marketing
(MLM) or network marketing associations tend to have more complex commission requirements/qualifications than standard affiliate programs.
, however, affiliate marketing is not easily scalable
.
). Merchants can choose from two different types of affiliate management solutions: standalone software or hosted services
, typically called affiliate networks. Payouts to affiliates or publishers are either made by the networks on behalf of the merchant, by the network, consolidated across all merchants where the publisher has a relationship with and earned commissions or directly by the merchant itself.
Uncontrolled affiliate programs did still do aid rogue affiliates, who use spamming, trademark infringement
, false advertising
, "cookie cutting", typosquatting
, and other unethical methods that have given affiliate marketing a negative reputation.
The increased number of Internet businesses and the increased number of people that trust the current technology enough to shop and do business online allows further maturation of affiliate marketing.
The opportunity to generate a considerable amount of profit combined with a crowded marketplace filled with competitors of equal quality and size makes it more difficult for merchants to be noticed. In this environment, however, being noticed can yield greater rewards.
Recently, the Internet marketing industry has become more advanced. In some areas online media has been rising to the sophistication of offline media, in which advertising has been largely professional and competitive. There are significantly more requirements that merchants must meet to be successful, and those requirements are becoming too burdensome for the merchant to manage successfully in-house.
An increasing number of merchants are seeking alternative options found in relatively new outsourced (affiliate) program management (OPM) companies, which are often founded by veteran affiliate managers and network program managers
. OPM companies perform affiliate program management for the merchants as a service, similar to advertising agencies promoting a brand or product as done in offline marketing.
Relevant websites that attract the same target audiences as the advertiser but without competing with it are potential affiliate partners as well. Vendors or existing customers can also become recruits if doing so makes sense and does not violate any laws or regulations.
Almost any website could be recruited as an affiliate publisher, but high-traffic websites are more likely interested in (for their own sake) low-risk cost per mille or medium-risk cost per click deals rather than higher-risk cost per action or revenue share deals.
If the above locations do not yield information pertaining to affiliates, it may be the case that there exists a non-public affiliate program. Utilizing one of the common website correlation
methods may provide clues about the affiliate network. The most definitive method for finding this information is to contact the website owner directly, if a contact method can be located.
, false advertising, forced clicks (to get tracking cookies
set on users' computers), adware
, and other methods to drive traffic to their sponsors. Although many affiliate programs have terms of service
that contain rules against spam, this marketing method has historically proven to attract abuse from spammers.
s provided by merchants. The goal of such webpages is to manipulate the relevancy or prominence of resources indexed by a search engine, also known as spamdexing
. Each page can be targeted to a different niche market through the use of specific keywords, with the result being a skewed form of search engine optimization.
Spam is the biggest threat to organic search engines, whose goal is to provide quality search results for keywords or phrases entered by their users. Google's PageRank
algorithm update ("BigDaddy") in February 2006—the final stage of Google's major update ("Jagger") that began in mid-summer 2005—specifically targeted spamdexing with great success. This update thus enabled Google to remove a large amount of mostly computer-generated duplicate content from its index.
Websites consisting mostly of affiliate links have previously held a negative reputation for underdelivering quality content. In 2005 there were active changes made by Google, where certain websites were labeled as "thin affiliates". Such websites were either removed from Google's index or were relocated within the results page (i.e., moved from the top-most results to a lower position). To avoid this categorization, affiliate marketer webmasters must create quality content on their websites that distinguishes their work from the work of spammers or banner
farms, which only contain links leading to merchant sites.
Some commentators originally suggested that Affiliate links work best in the context of the information contained within the website itself. For instance, if a website contains information pertaining to publishing a website, an affiliate link leading to a merchant's Internet service provider (ISP)
within that website's content would be appropriate. If a website contains information pertaining to sports, an affiliate link leading to a sporting goods website may work well within the context of the articles and information about sports. The goal in this case is to publish quality information within the website and provide context-oriented links to related merchant's websites.
However, more recent examples exist of "thin" affiliate sites that are using the Affiliate Marketing model to create value for Consumers by offering them a service. These thin content service Affiliate fall into three categories:
who alter the behavior of these servers such that the content they serve to end-users includes hidden I-frames and other exploits that leverage vulnerabilities in various web-browsers and operating systems for the purpose of infecting those systems with malware
. End users frequently confuse the source of their computer infection with a particular website they were viewing at the time, and not the advertising network that was linked to, by the website (commonly users themselves do not understand or appreciate there is a distinction).
, adware
often uses the same methods and technologies. Merchants initially were uninformed about adware, what impact it had, and how it could damage their brands. Affiliate marketers became aware of the issue much more quickly, especially because they noticed that adware often overwrites tracking cookies, thus resulting in a decline of commissions. Affiliates not employing adware felt that it was stealing commission from them. Adware often has no valuable purpose and rarely provides any useful content to the user, who is typically unaware that such software is installed on his/her computer.
Affiliates discussed the issues in Internet forums and began to organize their efforts. They believed that the best way to address the problem was to discourage merchants from advertising via adware. Merchants that were either indifferent to or supportive of adware were exposed by affiliates, thus damaging those merchants' reputations and tarnishing their affiliate marketing efforts. Many affiliates either terminated the use of such merchants or switched to a competitor's affiliate program. Eventually, affiliate networks were also forced by merchants and affiliates to take a stand and ban certain adware publishers from their network. The result was Code of Conduct by Commission Junction
/beFree and Performics
, LinkShare
's Anti-Predatory Advertising Addendum, and ShareASale
's complete ban of software applications as a medium for affiliates to promote advertiser offers. Regardless of the progress made, adware continues to be an issue, as demonstrated by the class action lawsuit against ValueClick
and its daughter company Commission Junction filed on April 20, 2007.
launched its pay per click service, Google AdWords, which is responsible for the widespread use and acceptance of pay per click as an advertising channel. An increasing number of merchants engaged in pay per click advertising, either directly or via a search marketing agency, and realized that this space was already well-occupied by their affiliates. Although this situation alone created advertising channel conflicts and debates between advertisers and affiliates, the largest issue concerned affiliates bidding on advertisers names, brands, and trademarks. Several advertisers began to adjust their affiliate program terms to prohibit their affiliates from bidding on those type of keywords. Some advertisers, however, did and still do embrace this behavior, going so far as to allow, or even encourage, affiliates to bid on any term, including the advertiser's trademarks. And some affiliates abuse it by bidding on those terms by excluding the location of the advertiser alone in many Search engines.
Online forums and industry trade shows are the only means for the different members from the industry—affiliates/publishers, merchants/advertisers, affiliate networks, third-party vendors, and service providers such as outsourced program managers—to congregate at one location. Online forums are free, enable small affiliates to have a larger say, and provide anonymity. Trade shows are cost-prohibitive to small affiliates because of the high price for event passes. Larger affiliates may even be sponsored by an advertiser they promote.
Because of the anonymity of online forums, the quantitative majority of industry members are unable to create any form of legally binding rule or regulation that must be followed throughout the industry. Online forums have had very few successes as representing the majority of the affiliate marketing industry. The most recent example of such a success was the halt of the
"Commission Junction Link Management Initiative" (CJ LMI) in June/July 2006, when a single network tried to impose the use of a Javascript
tracking code as a replacement for common HTML
links on its affiliates.
Education occurs most often in "real life" by becoming involved and learning the details as time progresses. Although there are several books on the topic, some so-called "how-to" or "silver bullet
" books instruct readers to manipulate holes in the Google algorithm
, which can quickly become out of date, or suggest strategies no longer endorsed or permitted by advertisers.
Outsourced Program Management companies typically combine formal and informal training, providing much of their training through group collaboration and brainstorming
. Such companies also try to send each marketing employee to the industry conference of their choice.
Other training resources used include online forums, weblogs, podcasts, video seminars, and specialty websites.
Affiliate Summit
is the largest conference in the industry, and many other affiliate networks host their own annual events.
/beFree and Performics
in December 2002 to guide practices and adherence to ethical standards for online advertising.
inserted an item in the state budget asserting sales tax
jurisdiction over Amazon.com
sales to residents of New York, based on the existence of affiliate links from New York–based websites to Amazon. The state asserts that even one such affiliate constitutes Amazon having a business presence in the state, and is sufficient to allow New York to tax all Amazon sales to state residents. Amazon challenged the amendment and lost at the trial level in January, 2009. The case is currently making its way through the New York appeals courts.
involves placing an affiliate tracking cookie
on a website visitor's computer without their knowledge, which will then generate revenue for the person doing the cookie stuffing. This not only generates fraudulent affiliate sales, but also has the potential to overwrite other affiliates' cookies, essentially stealing their legitimately earned commissions.
web sites use a click-to-reveal format, which requires the web site user to click to reveal the voucher code. The action of clicking places the cookie
on the website visitor's computer. The IAB have stated that "Affiliates must not use a mechanism whereby users are encouraged to click to interact with content where it is unclear or confusing what the outcome will be."
:Category:Internet marketing trade shows
The industry has four core players: the merchant (also known as 'retailer' or 'brand'), the network, the publisher (also known as 'the affiliate'), and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors
Vendor (supply chain)
A vendor, or a supplier, is a supply chain management term meaning anyone who provides goods or services to a company. A vendor often manufactures inventoriable items, and sells those items to a customer.- History :...
.
Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
methods. Those methods include organic
Organic search
Organic search results are listings on search engine results pages that appear because of their relevance to the search terms, as opposed to their being advertisements. In contrast, non-organic search results may include pay per click advertising....
search engine optimization
Search engine optimization
Search engine optimization is the process of improving the visibility of a website or a web page in search engines via the "natural" or un-paid search results...
, paid search engine marketing
Search engine marketing
Search engine marketing, , is a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages through the use of paid placement, contextual advertising, and paid inclusion...
, e-mail marketing
E-mail marketing
Email marketing is a form of direct marketing which uses email as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing...
, and in some sense display advertising
Display advertising
Display advertising is a type of advertising that typically contains text , logos, photographs or other images, location maps, and similar items. In periodicals, display advertising can appear on the same page as, or on the page adjacent to, general editorial content...
. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
Affiliate marketing—using one website to drive traffic
Internet traffic
-Historical Internet Traffic Growth:Because of the distributed nature of the Internet, there is no single point of measurement for total Internet traffic...
to another—is a form of online marketing, which is frequently overlooked by advertisers. While search engines, e-mail, and website syndication
Web syndication
Web syndication is a form of syndication in which website material is made available to multiple other sites. Most commonly, web syndication refers to making web feeds available from a site in order to provide other people with a summary or update of the website's recently added content...
capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers' marketing strategies
Marketing strategy
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.-Developing a marketing strategy:...
.
Origin
The concept of revenue sharingRevenue sharing
Revenue sharing has multiple, related meanings depending on context.In business, revenue sharing refers to the sharing of profits and losses among different groups. One form shares between the general partner and limited partners in a limited partnership...
—paying commission
Commission (remuneration)
The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold...
for referred business—predates affiliate marketing and the Internet. The translation of the revenue share principles to mainstream e-commerce
Electronic commerce
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
happened in November 1994, almost four years after the origination of the World Wide Web
World Wide Web
The World Wide Web is a system of interlinked hypertext documents accessed via the Internet...
.
Cybererotica was among the early innovators in affiliate marketing with a cost per click program.
During November 1994, CDNOW
CDNOW
CDNOW.com was an online retailer. The company was founded in February 1994 by twin brothers Jason Olim and Matthew Olim of Ambler, Pennsylvania...
launched its BuyWeb program. CDNOW had the idea that music-oriented websites could review or list albums on their pages that their visitors may be interested in purchasing. These websites could also offer a link that would take the visitor directly to CDNOW to purchase the albums. The idea for remote purchasing originally arose because of conversations with music label Geffen Records
Geffen Records
Geffen Records is an American record label, owned by Universal Music Group, and operated as one third of UMG's Interscope-Geffen-A&M label group.-Beginnings:...
in the fall of 1994. The management at Geffen wanted to sell its artists' CDs directly from its website, but did not want to implement this capability itself. Geffen asked CDNOW if it could design a program where CDNOW would handle the order fulfillment
Order fulfillment
Order fulfillment is in the most general sense the complete process from point of sales inquiry to delivery of a product to the customer...
. Geffen realized that CDNOW could link directly from the artist on its website to Geffen's website, bypassing the CDNOW home page and going directly to an artist's music page.
Amazon.com
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
(Amazon) launched its associate program in July 1996: Amazon associates could place banner
Web banner
A web banner or banner ad is a form of advertising on the World Wide Web delivered by an ad server. This form of online advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking to the website of the advertiser...
or text links on their site for individual books, or link directly to the Amazon home page.
When visitors clicked from the associate's website through to Amazon and purchased a book, the associate received a commission. Amazon was not the first merchant to offer an affiliate program, but its program was the first to become widely known and serve as a model for subsequent programs.
In February 2000, Amazon announced that it had been granted a patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
on components of an affiliate program. The patent application was submitted in June 1997, which predates most affiliate programs, but not PC Flowers & Gifts.com (October 1994), AutoWeb.com (October 1995), Kbkids.com/BrainPlay.com (January 1996), EPage (April 1996), and several others.
Historic development
Affiliate marketing has grown quickly since its inception. The e-commerceElectronic commerce
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
website, viewed as a marketing toy in the early days of the Internet, became an integrated part of the overall business plan and in some cases grew to a bigger business than the existing offline business. According to one report, the total sales amount generated through affiliate networks in 2006 was £2.16 billion in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
alone. The estimates were £1.35 billion in sales in 2005. MarketingSherpa's research team estimated that, in 2006, affiliates worldwide earned US$6.5 billion in bounty and commissions from a variety of sources in retail, personal finance, gaming and gambling, travel, telecom
Telecommunication
Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...
, education, publishing, and forms of lead
Sales lead
A sales lead, or Sales Lead, is the identification of a person or entity that has the interest and authority to purchase a product or service. This step represents the first stage of a sales process. The lead may have a corporation or business associated with the person. Sales leads are generic...
generation other than contextual advertising
Contextual advertising
Contextual advertising is a form of targeted advertising for advertisements appearing on websites or other media, such as content displayed in mobile browsers...
programs.
Currently the most active sectors for affiliate marketing are the adult, gambling, retail industries and file-sharing services. The three sectors expected to experience the greatest growth are the mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
, finance, and travel sectors. Soon after these sectors came the entertainment (particularly gaming) and Internet-related services (particularly broadband
Broadband
The term broadband refers to a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device . Different criteria for "broad" have been applied in different contexts and at different times...
) sectors. Also several of the affiliate solution providers expect to see increased interest from business-to-business
Business-to-business
Business-to-business describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer...
marketers and advertisers in using affiliate marketing as part of their mix.
Web 2.0
Websites and services based on Web 2.0Web 2.0
The term Web 2.0 is associated with web applications that facilitate participatory information sharing, interoperability, user-centered design, and collaboration on the World Wide Web...
concepts—blogging and interactive online communities
Virtual community
A virtual community is a social network of individuals who interact through specific media, potentially crossing geographical and political boundaries in order to pursue mutual interests or goals...
, for example—have impacted the affiliate marketing world as well. The new media allowed merchants to become closer to their affiliates and improved the communication between them.
Predominant compensation methods
Eighty percent of affiliate programs today use revenue sharingRevenue sharing
Revenue sharing has multiple, related meanings depending on context.In business, revenue sharing refers to the sharing of profits and losses among different groups. One form shares between the general partner and limited partners in a limited partnership...
or pay per sale
Pay Per Sale
Pay-per-sale or PPS is an online advertisement pricing system where the publisher or website owner is paid on the basis of the number of sales that are directly generated by an advertisement...
(PPS) as a compensation method, nineteen percent use cost per action
Cost Per Action
Cost Per Action or CPA is an online advertising pricing model, where the advertiser pays for each specified action linked to the advertisement....
(CPA), and the remaining programs use other methods such as cost per click (CPC) or cost per mille
Cost Per Mille
Cost per mille , also called cost ‰ and cost per thousand , is a commonly used measurement in advertising. Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of what it costs to show the ad to one thousand viewers...
(CPM).
Diminished compensation methods
Within more mature markets, less than one percent of traditional affiliate marketing programs today use cost per click and cost per mille. However, these compensation methods are used heavily in display advertisingDisplay advertising
Display advertising is a type of advertising that typically contains text , logos, photographs or other images, location maps, and similar items. In periodicals, display advertising can appear on the same page as, or on the page adjacent to, general editorial content...
and paid search.
Cost per mille requires only that the publisher make the advertising available on his website and display it to his visitors in order to receive a commission. Pay per click requires one additional step in the conversion process to generate revenue for the publisher: A visitor must not only be made aware of the advertisement, but must also click on the advertisement to visit the advertiser's website.
Cost per click was more common in the early days of affiliate marketing, but has diminished in use over time due to click fraud
Click fraud
Click fraud is a type of Internet crime that occurs in pay per click online advertising when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target...
issues very similar to the click fraud issues modern search engines are facing today. Contextual advertising programs are not considered in the statistic pertaining to diminished use of cost per click, as it is uncertain if contextual advertising can be considered affiliate marketing.
While these models have diminished in mature e-commerce and online advertising markets they are still prevalent in some more nascent industries. China is one example where Affiliate Marketing does not overtly resemble the same model in the West. With many affiliates being paid a flat "Cost Per Day" with some networks offering Cost Per Click or CPM.
Performance marketing
In the case of cost per milleCost Per Mille
Cost per mille , also called cost ‰ and cost per thousand , is a commonly used measurement in advertising. Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of what it costs to show the ad to one thousand viewers...
/click, the publisher is not concerned about a visitor being a member of the audience that the advertiser tries to attract and is able to convert, because at this point the publisher has already earned his commission. This leaves the greater, and, in case of cost per mille, the full risk and loss (if the visitor can not be converted) to the advertiser.
Cost per action/sale methods require that referred visitors do more than visit the advertiser's website before the affiliate receives commission. The advertiser must convert that visitor first. It is in the best interest for the affiliate to send the most closely targeted traffic to the advertiser as possible to increase the chance of a conversion. The risk and loss is shared between the affiliate and the advertiser.
Affiliate marketing is also called "performance marketing", in reference to how sales employees are typically being compensated. Such employees are typically paid a commission for each sale they close, and sometimes are paid performance incentives for exceeding targeted baselines. Affiliates are not employed by the advertiser whose products or services they promote, but the compensation models applied to affiliate marketing are very similar to the ones used for people in the advertisers' internal sales department.
The phrase, "Affiliates are an extended sales force for your business", which is often used to explain affiliate marketing, is not completely accurate. The primary difference between the two is that affiliate marketers provide little if any influence on a possible prospect in the conversion process once that prospect is directed to the advertiser's website. The sales team of the advertiser, however, does have the control and influence up to the point where the prospect signs the contract or completes the purchase.
Multi-tier programs
Some advertisers offer multi-tier programs that distribute commission into a hierarchical referral network of sign-ups and sub-partners. In practical terms, publisher "A" signs up to the program with an advertiser and gets rewarded for the agreed activity conducted by a referred visitor. If publisher "A" attracts publishers "B" and "C" to sign up for the same program using his sign-up code, all future activities performed by publishers "B" and "C" will result in additional commission (at a lower rate) for publisher "A".Two-tier programs exist in the minority of affiliate programs; most are simply one-tier. Referral programs beyond two-tier resemble multi-level marketing
Multi-level marketing
Multi-level marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation...
(MLM) or network marketing but are different: Multi-level marketing
Multi-level marketing
Multi-level marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation...
(MLM) or network marketing associations tend to have more complex commission requirements/qualifications than standard affiliate programs.
Pros and cons
Merchants favor affiliate marketing because in most cases it uses a "pay for performance" model, meaning that the merchant does not incur a marketing expense unless results are accrued (excluding any initial setup cost). Some businesses owe much of their success to this marketing technique, a notable example being Amazon.com. Unlike display advertisingDisplay advertising
Display advertising is a type of advertising that typically contains text , logos, photographs or other images, location maps, and similar items. In periodicals, display advertising can appear on the same page as, or on the page adjacent to, general editorial content...
, however, affiliate marketing is not easily scalable
Scalability
In electronics scalability is the ability of a system, network, or process, to handle growing amount of work in a graceful manner or its ability to be enlarged to accommodate that growth...
.
Implementation options
Some merchants run their own (in-house) affiliate programs using popular software while others use third-party services provided by intermediaries to track traffic or sales that are referred from affiliates (see outsourced program managementAffiliate manager
An affiliate manager manages affiliate programs by helping affiliates generate sales, track purchases and send commission, among other activities.-See also:* Affiliate* Affiliate marketing* Affiliate Networks* Internet marketing...
). Merchants can choose from two different types of affiliate management solutions: standalone software or hosted services
Application service provider
An application service provider is a business that provides computer-based services to customers over a network. Software offered using an ASP model is also sometimes called On-demand software or software as a service ....
, typically called affiliate networks. Payouts to affiliates or publishers are either made by the networks on behalf of the merchant, by the network, consolidated across all merchants where the publisher has a relationship with and earned commissions or directly by the merchant itself.
Affiliate management and program management outsourcing
Successful affiliate programs require significant work and maintenance. Having a successful affiliate program is more difficult than when such programs were just emerging. With the exception of some vertical markets, it is rare for an affiliate program to generate considerable revenue with poor management or no management ("auto-drive").Uncontrolled affiliate programs did still do aid rogue affiliates, who use spamming, trademark infringement
Trademark infringement
Trademark infringement is a violation of the exclusive rights attaching to a trademark without the authorization of the trademark owner or any licensees...
, false advertising
False advertising
False advertising or deceptive advertising is the use of false or misleading statements in advertising. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or...
, "cookie cutting", typosquatting
Typosquatting
Typosquatting, also called URL hijacking, is a form of cybersquatting, and possibly brandjacking which relies on mistakes such as typographical errors made by Internet users when inputting a website address into a web browser...
, and other unethical methods that have given affiliate marketing a negative reputation.
The increased number of Internet businesses and the increased number of people that trust the current technology enough to shop and do business online allows further maturation of affiliate marketing.
The opportunity to generate a considerable amount of profit combined with a crowded marketplace filled with competitors of equal quality and size makes it more difficult for merchants to be noticed. In this environment, however, being noticed can yield greater rewards.
Recently, the Internet marketing industry has become more advanced. In some areas online media has been rising to the sophistication of offline media, in which advertising has been largely professional and competitive. There are significantly more requirements that merchants must meet to be successful, and those requirements are becoming too burdensome for the merchant to manage successfully in-house.
An increasing number of merchants are seeking alternative options found in relatively new outsourced (affiliate) program management (OPM) companies, which are often founded by veteran affiliate managers and network program managers
Affiliate networks
An affiliate network acts as an intermediary between publishers and merchant affiliate programs. It allows website publishers to more easily find and participate in affiliate programs which are suitable for their website , and allows websites offering affiliate programs to reach a larger audience...
. OPM companies perform affiliate program management for the merchants as a service, similar to advertising agencies promoting a brand or product as done in offline marketing.
Types of affiliate websites
Affiliate websites are often categorized by merchants ( advertisers) and affiliate networks. There are currently no industry-wide standards for the categorization. The following types of websites are generic, yet are commonly understood and used by affiliate marketers.- Search affiliates that utilize pay per clickPay per clickPay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...
search engines to promote the advertisers' offers (i.e., search arbitrageArbitrageIn economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
) - Comparison shoppingPrice comparison serviceOn the internet, a price comparison service allows individuals to see different lists of prices for specific products. Most price comparison services do not sell products themselves, but source prices from retailers from whom users can buy...
websites and directories - LoyaltyLoyaltyLoyalty is faithfulness or a devotion to a person, country, group, or cause There are many aspects to...
websites, typically characterized by providing a reward system for purchases via points back, cash back - CRM sites that offer charitable donations
- CouponCouponIn marketing, a coupon is a ticket or document that can be exchanged for a financial discount or rebate when purchasing a product. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in retail stores as a part of sales promotions...
and rebateRebateRebate can refer to:* Rebate or rabbet, a woodworking term for a groove* Film rebate, the term for the border around photographic film- Money :* Rebate , a type of sales promotion used in marketing* Tax rebate, a reduction in taxation demanded...
websites that focus on sales promotionSales promotionSales promotion is one of the four aspects of promotional mix. Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability...
s - Content and niche marketNiche marketA niche market is the subset of the market on which a specific product is focusing; therefore the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact...
websites, including product review sites - Personal websites
- WeblogsBlogA blog is a type of website or part of a website supposed to be updated with new content from time to time. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in...
and website syndicationRSS-Mathematics:* Root-sum-square, the square root of the sum of the squares of the elements of a data set* Residual sum of squares in statistics-Technology:* RSS , "Really Simple Syndication" or "Rich Site Summary", a family of web feed formats...
feeds - E-mailE-mail marketingEmail marketing is a form of direct marketing which uses email as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing...
list affiliates (i.e., owners of large opt-in -mail lists that typically employ e-mail drip marketing) and newsletterNewsletterA newsletter is a regularly distributed publication generally about one main topic that is of interest to its subscribers. Newspapers and leaflets are types of newsletters. Additionally, newsletters delivered electronically via email have gained rapid acceptance for the same reasons email in...
list affiliates, which are typically more content-heavy - Registration path or co-registration affiliates who include offers from other merchants during the registration process on their own website
- Shopping directoriesShopping directoryA shopping directory is a "Yellow Pages Directory Style" website similar to the Open Directory Project or the Yahoo! Directory with focus on sites that sell products or services, usually referred to as ecommerce websites....
that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updates - Cost per action networks (i.e., top-tier affiliates) that expose offers from the advertiser with which they are affiliated to their own network of affiliates
- Websites using adbars (e.g. AdsenseAdSenseGoogle AdSense which is a program run by Google Inc. allows publishers in the Google Network of content sites to automatically serve text, image, video, and rich media adverts that are targeted to site content and audience. These adverts are administered, sorted, and maintained by Google, and they...
) to display context-sensitive, highly relevant ads for products on the site - Virtual Currency: a new type of publisher that utilizes the social media space to couple an advertiser's offer with a handout of "virtual currency" in a game or virtual platform.
- Video Blog: Video content that allows viewers to click on and purchase products related to the video's subject.
- File-Sharing: Web sites that host directories of music, movies, games and other software. Users upload content (usually in violation of copyright) to file-hosting sites, and then post descriptions of the material and their download links on directory sites. Uploaders are paid by the file-hosting sites based on the number of times their files are downloaded. The file-hosting sites sell premium download access to the files to the general public. The web sites that host the directory services sell advertising and do not host the files themselves.
Publisher recruitment
Affiliate networks that already have several advertisers typically also have a large pool of publishers. These publishers could be potentially recruited, and there is also an increased chance that publishers in the network apply to the program on their own, without the need for recruitment efforts by the advertiser.Relevant websites that attract the same target audiences as the advertiser but without competing with it are potential affiliate partners as well. Vendors or existing customers can also become recruits if doing so makes sense and does not violate any laws or regulations.
Almost any website could be recruited as an affiliate publisher, but high-traffic websites are more likely interested in (for their own sake) low-risk cost per mille or medium-risk cost per click deals rather than higher-risk cost per action or revenue share deals.
Locating affiliate programs
There are three primary ways to locate affiliate programs for a target website:- Affiliate program directoriesAffiliate programs directoriesAffiliate program directories are niche web directories that are very like the large and broad web directories such as the Yahoo! Directory or the Open Directory Project...
, - Large affiliate networks that provide the platform for dozens or even hundreds of advertisers, and
- The target website itself. (Websites that offer an affiliate program often have a link titled "affiliate program", "affiliates", "referral program", or "webmasters"—usually in the footer or "About" section of the website.)
If the above locations do not yield information pertaining to affiliates, it may be the case that there exists a non-public affiliate program. Utilizing one of the common website correlation
Website correlation
Website correlation, or website matching, is a process used to identify websites that are similar or related. Websites are inherently easy to duplicate. This led to proliferation of identical websites or very similar websites for purposes ranging from translation to Internet marketing to...
methods may provide clues about the affiliate network. The most definitive method for finding this information is to contact the website owner directly, if a contact method can be located.
Past and current issues
Since the emergence of affiliate marketing, there has been little control over affiliate activity. Unscrupulous affiliates have used spamSpam (electronic)
Spam is the use of electronic messaging systems to send unsolicited bulk messages indiscriminately...
, false advertising, forced clicks (to get tracking cookies
HTTP cookie
A cookie, also known as an HTTP cookie, web cookie, or browser cookie, is used for an origin website to send state information to a user's browser and for the browser to return the state information to the origin site...
set on users' computers), adware
Adware
Adware, or advertising-supported software, is any software package which automatically plays, displays, or downloads advertisements to a computer. These advertisements can be in the form of a pop-up. They may also be in the user interface of the software or on a screen presented to the user during...
, and other methods to drive traffic to their sponsors. Although many affiliate programs have terms of service
Terms of service
Terms of service are rules which one must agree to abide by in order to use a service. Unless in violation of consumer protection laws, such terms are usually legally binding...
that contain rules against spam, this marketing method has historically proven to attract abuse from spammers.
E-mail spam
In the infancy of affiliate marketing, many Internet users held negative opinions due to the tendency of affiliates to use spam to promote the programs in which they were enrolled. As affiliate marketing matured, many affiliate merchants have refined their terms and conditions to prohibit affiliates from spamming.Search engine spam
As search engines have become more prominent, some affiliate marketers have shifted from sending e-mail spam to creating automatically generated webpages that often contain product data feedData feed
Data feed is a mechanism for users to receive updated data from data sources. It is commonly used by real-time applications in point-to-point settings as well as on the world-wide web. The latter is also called Web feed. News feed is a popular form of Web feed. RSS feed makes dissemination of blogs...
s provided by merchants. The goal of such webpages is to manipulate the relevancy or prominence of resources indexed by a search engine, also known as spamdexing
Spamdexing
In computing, spamdexing is the deliberate manipulation of search engine indexes...
. Each page can be targeted to a different niche market through the use of specific keywords, with the result being a skewed form of search engine optimization.
Spam is the biggest threat to organic search engines, whose goal is to provide quality search results for keywords or phrases entered by their users. Google's PageRank
PageRank
PageRank is a link analysis algorithm, named after Larry Page and used by the Google Internet search engine, that assigns a numerical weighting to each element of a hyperlinked set of documents, such as the World Wide Web, with the purpose of "measuring" its relative importance within the set...
algorithm update ("BigDaddy") in February 2006—the final stage of Google's major update ("Jagger") that began in mid-summer 2005—specifically targeted spamdexing with great success. This update thus enabled Google to remove a large amount of mostly computer-generated duplicate content from its index.
Websites consisting mostly of affiliate links have previously held a negative reputation for underdelivering quality content. In 2005 there were active changes made by Google, where certain websites were labeled as "thin affiliates". Such websites were either removed from Google's index or were relocated within the results page (i.e., moved from the top-most results to a lower position). To avoid this categorization, affiliate marketer webmasters must create quality content on their websites that distinguishes their work from the work of spammers or banner
Web banner
A web banner or banner ad is a form of advertising on the World Wide Web delivered by an ad server. This form of online advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking to the website of the advertiser...
farms, which only contain links leading to merchant sites.
Some commentators originally suggested that Affiliate links work best in the context of the information contained within the website itself. For instance, if a website contains information pertaining to publishing a website, an affiliate link leading to a merchant's Internet service provider (ISP)
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
within that website's content would be appropriate. If a website contains information pertaining to sports, an affiliate link leading to a sporting goods website may work well within the context of the articles and information about sports. The goal in this case is to publish quality information within the website and provide context-oriented links to related merchant's websites.
However, more recent examples exist of "thin" affiliate sites that are using the Affiliate Marketing model to create value for Consumers by offering them a service. These thin content service Affiliate fall into three categories:
- Price comparison
- Cause related marketing
- Time saving
Virus and Trojan distribution through advertising networks
Server farms hosting advertising content are periodically infected by hackersHacker (computer security)
In computer security and everyday language, a hacker is someone who breaks into computers and computer networks. Hackers may be motivated by a multitude of reasons, including profit, protest, or because of the challenge...
who alter the behavior of these servers such that the content they serve to end-users includes hidden I-frames and other exploits that leverage vulnerabilities in various web-browsers and operating systems for the purpose of infecting those systems with malware
Malware
Malware, short for malicious software, consists of programming that is designed to disrupt or deny operation, gather information that leads to loss of privacy or exploitation, or gain unauthorized access to system resources, or that otherwise exhibits abusive behavior...
. End users frequently confuse the source of their computer infection with a particular website they were viewing at the time, and not the advertising network that was linked to, by the website (commonly users themselves do not understand or appreciate there is a distinction).
Consumer countermeasures
The implementation of affiliate marketing on the internet relies heavily on various techniques built into the design of many web-pages and web-sites, and the use of calls to external domains to track user actions (click tracking, Ad Sense) and to serve up content (advertising) to the user. Most of this activity adds time and is generally a nuisance to the casual web-surfer and is seen as visual clutter. Various countermeasures have evolved over time to prevent or eliminate the appearance of advertising when a web-page is rendered. Third party programs (Ad Aware, SpyBot, pop-up blockers, etc.) and particularly, the use of a comprehensive HOSTS file can effectively eliminate the visual clutter and the extra time and bandwidth needed to render many web pages. The use of specific entries in the HOSTS file to block these well-known and persistent marketing and click-tracking domains can also aid in reducing a system's exposure to malware by preventing the content of infected advertising or tracking servers to reach a user's web-browser.Adware
Although it differs from spywareSpyware
Spyware is a type of malware that can be installed on computers, and which collects small pieces of information about users without their knowledge. The presence of spyware is typically hidden from the user, and can be difficult to detect. Typically, spyware is secretly installed on the user's...
, adware
Adware
Adware, or advertising-supported software, is any software package which automatically plays, displays, or downloads advertisements to a computer. These advertisements can be in the form of a pop-up. They may also be in the user interface of the software or on a screen presented to the user during...
often uses the same methods and technologies. Merchants initially were uninformed about adware, what impact it had, and how it could damage their brands. Affiliate marketers became aware of the issue much more quickly, especially because they noticed that adware often overwrites tracking cookies, thus resulting in a decline of commissions. Affiliates not employing adware felt that it was stealing commission from them. Adware often has no valuable purpose and rarely provides any useful content to the user, who is typically unaware that such software is installed on his/her computer.
Affiliates discussed the issues in Internet forums and began to organize their efforts. They believed that the best way to address the problem was to discourage merchants from advertising via adware. Merchants that were either indifferent to or supportive of adware were exposed by affiliates, thus damaging those merchants' reputations and tarnishing their affiliate marketing efforts. Many affiliates either terminated the use of such merchants or switched to a competitor's affiliate program. Eventually, affiliate networks were also forced by merchants and affiliates to take a stand and ban certain adware publishers from their network. The result was Code of Conduct by Commission Junction
Commission Junction
Commission Junction is an online advertising company owned by ValueClick and operating in the affiliate marketing industry. The company is the largest affiliate network in North America and operates worldwide. Among the top 500 retailers using 3rd party affiliate marketing software, 62% are powered...
/beFree and Performics
Performics
Performics is a performance marketing agency that provides paid search, natural search, social, display, affiliate and mobile marketing solutions to a variety of Fortune 500 and smaller clients...
, LinkShare
Linkshare
LinkShare Corporation provides ecommerce businesses with a range of online marketing services including Search Marketing , Lead Generation and Affiliate Marketing....
's Anti-Predatory Advertising Addendum, and ShareASale
Shareasale
ShareASale is an affiliate marketing network based in Chicago, IL USA. ShareASale services two customer sets in affiliate marketing: the affiliate, and the merchant....
's complete ban of software applications as a medium for affiliates to promote advertiser offers. Regardless of the progress made, adware continues to be an issue, as demonstrated by the class action lawsuit against ValueClick
ValueClick
ValueClick is a Westlake Village, CA-based online advertising company, which provides online advertising campaigns and programs for advertisers and advertising agency customers in the United States and internationally....
and its daughter company Commission Junction filed on April 20, 2007.
Trademark bidding
Affiliates were among the earliest adopters of pay per click advertising when the first pay-per-click search engines emerged during the end of the 1990s. Later in 2000 GoogleGoogle
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
launched its pay per click service, Google AdWords, which is responsible for the widespread use and acceptance of pay per click as an advertising channel. An increasing number of merchants engaged in pay per click advertising, either directly or via a search marketing agency, and realized that this space was already well-occupied by their affiliates. Although this situation alone created advertising channel conflicts and debates between advertisers and affiliates, the largest issue concerned affiliates bidding on advertisers names, brands, and trademarks. Several advertisers began to adjust their affiliate program terms to prohibit their affiliates from bidding on those type of keywords. Some advertisers, however, did and still do embrace this behavior, going so far as to allow, or even encourage, affiliates to bid on any term, including the advertiser's trademarks. And some affiliates abuse it by bidding on those terms by excluding the location of the advertiser alone in many Search engines.
Lack of self-regulation and collaboration
Affiliate marketing is driven by entrepreneurs who are working at the edge of Internet marketing. Affiliates are often the first to take advantage of emerging trends and technologies. The "trial and error" approach is probably the best way to describe the operation methods for affiliate marketers. This risky approach is one of the reasons why most affiliates fail or give up before they become successful "super affiliates", capable of generating US$10,000 or more per month in commission. This "frontier" life combined with the attitude found in such communities is likely the main reason why the affiliate marketing industry is unable to self-regulate beyond individual contracts between advertisers and affiliates. Affiliate marketing has experienced numerous failed attempts to create an industry organization or association of some kind that could be the initiator of regulations, standards, and guidelines for the industry. Some examples of failed regulation efforts are the Affiliate Union and iAfma.Online forums and industry trade shows are the only means for the different members from the industry—affiliates/publishers, merchants/advertisers, affiliate networks, third-party vendors, and service providers such as outsourced program managers—to congregate at one location. Online forums are free, enable small affiliates to have a larger say, and provide anonymity. Trade shows are cost-prohibitive to small affiliates because of the high price for event passes. Larger affiliates may even be sponsored by an advertiser they promote.
Because of the anonymity of online forums, the quantitative majority of industry members are unable to create any form of legally binding rule or regulation that must be followed throughout the industry. Online forums have had very few successes as representing the majority of the affiliate marketing industry. The most recent example of such a success was the halt of the
"Commission Junction Link Management Initiative" (CJ LMI) in June/July 2006, when a single network tried to impose the use of a Javascript
JavaScript
JavaScript is a prototype-based scripting language that is dynamic, weakly typed and has first-class functions. It is a multi-paradigm language, supporting object-oriented, imperative, and functional programming styles....
tracking code as a replacement for common HTML
HTML
HyperText Markup Language is the predominant markup language for web pages. HTML elements are the basic building-blocks of webpages....
links on its affiliates.
Certification and training
Affiliate marketing currently lacks industry standards for training and certification. There are some training courses and seminars that result in certifications; however, the acceptance of such certifications is mostly due to the reputation of the individual or company issuing the certification. Affiliate marketing is not commonly taught in universities, and only a few college instructors work with Internet marketers to introduce the subject to students majoring in marketing.Education occurs most often in "real life" by becoming involved and learning the details as time progresses. Although there are several books on the topic, some so-called "how-to" or "silver bullet
Silver bullet
In folklore, the silver bullet is supposed to be the only kind of bullet for firearms that is effective against a werewolf, witch, or other monsters...
" books instruct readers to manipulate holes in the Google algorithm
Algorithm
In mathematics and computer science, an algorithm is an effective method expressed as a finite list of well-defined instructions for calculating a function. Algorithms are used for calculation, data processing, and automated reasoning...
, which can quickly become out of date, or suggest strategies no longer endorsed or permitted by advertisers.
Outsourced Program Management companies typically combine formal and informal training, providing much of their training through group collaboration and brainstorming
Brainstorming
Brainstorming is a group creativity technique by which a group tries to find a solution for a specific problem by gathering a list of ideas spontaneously contributed by its members...
. Such companies also try to send each marketing employee to the industry conference of their choice.
Other training resources used include online forums, weblogs, podcasts, video seminars, and specialty websites.
Affiliate Summit
Affiliate Summit
The Affiliate Summit conference was founded by Affiliate marketing industry veterans Shawn Collins , and Missy Ward and focuses on the affiliate marketing professional community...
is the largest conference in the industry, and many other affiliate networks host their own annual events.
Code of conduct
A code of conduct was released by affiliate networks Commission JunctionCommission Junction
Commission Junction is an online advertising company owned by ValueClick and operating in the affiliate marketing industry. The company is the largest affiliate network in North America and operates worldwide. Among the top 500 retailers using 3rd party affiliate marketing software, 62% are powered...
/beFree and Performics
Performics
Performics is a performance marketing agency that provides paid search, natural search, social, display, affiliate and mobile marketing solutions to a variety of Fortune 500 and smaller clients...
in December 2002 to guide practices and adherence to ethical standards for online advertising.
Marketing term
Members of the marketing industry are recommending that "affiliate marketing" be substituted with an alternative name. Affiliate marketing is often confused with either network marketing or multi-level marketing. Performance marketing is a common alternative, but other recommendations have been made as well.Sales tax vulnerability
In April 2008 the State of New YorkNew York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
inserted an item in the state budget asserting sales tax
Sales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
jurisdiction over Amazon.com
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
sales to residents of New York, based on the existence of affiliate links from New York–based websites to Amazon. The state asserts that even one such affiliate constitutes Amazon having a business presence in the state, and is sufficient to allow New York to tax all Amazon sales to state residents. Amazon challenged the amendment and lost at the trial level in January, 2009. The case is currently making its way through the New York appeals courts.
Cookie stuffing
Cookie stuffingCookie stuffing
Cookie stuffing is a blackhat online marketing technique used to generate illegitimate affiliate sales. Cookie stuffing occurs when a user visits a website, and as a result of that visit receives a third-party cookie from an entirely different website , usually without the user being aware of...
involves placing an affiliate tracking cookie
HTTP cookie
A cookie, also known as an HTTP cookie, web cookie, or browser cookie, is used for an origin website to send state information to a user's browser and for the browser to return the state information to the origin site...
on a website visitor's computer without their knowledge, which will then generate revenue for the person doing the cookie stuffing. This not only generates fraudulent affiliate sales, but also has the potential to overwrite other affiliates' cookies, essentially stealing their legitimately earned commissions.
Click to reveal
Many voucher codeCoupon
In marketing, a coupon is a ticket or document that can be exchanged for a financial discount or rebate when purchasing a product. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in retail stores as a part of sales promotions...
web sites use a click-to-reveal format, which requires the web site user to click to reveal the voucher code. The action of clicking places the cookie
HTTP cookie
A cookie, also known as an HTTP cookie, web cookie, or browser cookie, is used for an origin website to send state information to a user's browser and for the browser to return the state information to the origin site...
on the website visitor's computer. The IAB have stated that "Affiliates must not use a mechanism whereby users are encouraged to click to interact with content where it is unclear or confusing what the outcome will be."
Affiliate services
- Affiliate tracking softwareAffiliate tracking softwareAffiliate tracking software describes the technology used to track or manage a myriad of affiliate marketing activities. Traditionally, affiliate tracking software provides the means to track performance based online marketing, or Cost Per Lead and Cost Per Action...
- Affiliate programs directoriesAffiliate programs directoriesAffiliate program directories are niche web directories that are very like the large and broad web directories such as the Yahoo! Directory or the Open Directory Project...
- Affiliate networksAffiliate networksAn affiliate network acts as an intermediary between publishers and merchant affiliate programs. It allows website publishers to more easily find and participate in affiliate programs which are suitable for their website , and allows websites offering affiliate programs to reach a larger audience...
(see also :Category:Internet advertising services and affiliate networks) - Affiliate managerAffiliate managerAn affiliate manager manages affiliate programs by helping affiliates generate sales, track purchases and send commission, among other activities.-See also:* Affiliate* Affiliate marketing* Affiliate Networks* Internet marketing...
and Outsourced Program Management (OPM or APM) (manages affiliates)
:Category:Internet marketing trade shows
See also
- Broad: Internet marketingInternet marketingInternet marketing, also known as digital marketing, web marketing, online marketing, search marketing or e-marketing, is referred to as the marketing of products or services over the Internet...
, online marketing, online advertisingOnline advertisingOnline advertising is a form of promotion that uses the Internet and World Wide Web to deliver marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, blogs, Rich Media Ads, Social network advertising, interstitial...
, Website monetizingWebsite monetizingWebsite monetization is the process of converting existing traffic being sent to a particular website into revenue. Pay per click is one of the most popular ways of monetizing a website...
, Post-click marketingPost-click marketingPost-click marketing is emerging as a recognized practice that aims at improving sales and marketing results by focusing on website visitors when they respond to online marketing activities such as pay per click advertising, HTML e-mails, and paid searches with the objective on increasing... - Advertising methods: Web bannerWeb bannerA web banner or banner ad is a form of advertising on the World Wide Web delivered by an ad server. This form of online advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking to the website of the advertiser...
, ad filteringAd filteringAd filtering or ad blocking is removing or altering advertising content in a webpage. Advertising can exist in a variety of forms including pictures, animations, text, or pop-up windows. More advanced filters allow fine-grained control of advertisements through features such as blacklists,...
, ad servingAd servingAd serving describes the technology and service that places advertisements on web sites. Ad serving technology companies provide software to web sites and advertisers to serve ads, count them, choose the ads that will make the website or advertiser most money, and monitor progress of different...
, central ad server, pop-up adPop-up adPop-up ads or pop-ups are a form of online advertising on the World Wide Web intended to attract web traffic or capture email addresses. Pop-ups are generally new web browser windows to display advertisements...
, contextual advertisingContextual advertisingContextual advertising is a form of targeted advertising for advertisements appearing on websites or other media, such as content displayed in mobile browsers... - E-Mail advertising: E-mail spamE-mail spamEmail spam, also known as junk email or unsolicited bulk email , is a subset of spam that involves nearly identical messages sent to numerous recipients by email. Definitions of spam usually include the aspects that email is unsolicited and sent in bulk. One subset of UBE is UCE...
, e-mail marketingE-mail marketingEmail marketing is a form of direct marketing which uses email as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing...
, spammingSpam (electronic)Spam is the use of electronic messaging systems to send unsolicited bulk messages indiscriminately... - Marketing tactics: Guerilla marketing, marketing strategyMarketing strategyMarketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.-Developing a marketing strategy:...
and guerrilla marketing warfare strategiesGuerrilla marketing warfare strategiesIn marketing and strategic management, marketing warfare strategies are a type of marketing strategy that uses military strategy to form a marketing and advertising campaign...
, evangelism marketingEvangelism marketingEvangelism marketing is an advanced form of word of mouth marketing in which companies develop customers who believe so strongly in a particular product or service that they freely try to convince others to buy and use it...
, word of mouth marketing - Search engines: Search engine marketingSearch engine marketingSearch engine marketing, , is a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages through the use of paid placement, contextual advertising, and paid inclusion...
(SEM), search engine optimizationSearch engine optimizationSearch engine optimization is the process of improving the visibility of a website or a web page in search engines via the "natural" or un-paid search results...
(SEO), pay per clickPay per clickPay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...
, click fraudClick fraudClick fraud is a type of Internet crime that occurs in pay per click online advertising when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target...
, paid inclusion - Industry calculations: Click through rate (CTR), cost per action (CPA)Cost Per ActionCost Per Action or CPA is an online advertising pricing model, where the advertiser pays for each specified action linked to the advertisement....
, cost per click (CPC), cost per impression (CPI)Cost Per ImpressionCost per impression, often abbreviated to CPI or CPM for Cost per thousand impressions, is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners,...
, cost per mille (CPM)Cost Per MilleCost per mille , also called cost ‰ and cost per thousand , is a commonly used measurement in advertising. Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of what it costs to show the ad to one thousand viewers...
, effective cost per mille (eCPM) - Compensation/Pricing: Compensation methodsCompensation methodsCompensation methods , Pricing models and business models used for the different types of internet marketing, including affiliate marketing, contextual advertising, search engine marketing and display advertising.-Predominant compensation methods in affiliate marketing:The following models...
, :Category:Compensation, :Category:Pricing
External links
- Website Affiliate Programs at the Yahoo! DirectoryYahoo! DirectoryThe Yahoo! Directory is a web directory that rivals the Open Directory Project in size. The directory was Yahoo!'s first offering. When Yahoo! changed to crawler-based listings for its main results in October 2002, the human-edited directory's significance dropped, but it was still being updated in...
- Affiliate Programs at the BOTW DirectoryBest of the Web DirectoryBest of the Web Directory is a commercial web directory providing websites categorized topically and regionally. Headquartered in Jericho, New York, BOTW also maintains offices in Orange, Texas, Rocklin, California, Studio City, California and Highland Beach, Florida.Founded in 1994 at the...