Imagine yourself creating a small business, and looking to spread the word about your new products and services. Where will you advertise? Who will help carry your message?
Avenues like the Internet have provided businesses more opportunities to connect with a high variety of consumers. Unfortunately, the Internet is also an extremely “noisy” environment, where consumers are pelted with advertisements from a variety of directions from untrusted sources.
Hoping to cut through some of this noise, many businesses enter into affiliate partnerships, where a website advertises the business for commission. These tactics allow businesses to enter into partnerships with trusted sources who market the business. Instead of paying a set price for a certain ad period, companies pay by performance for affiliate campaigns, giving many newer businesses a cheaper alternative to traditional marketing routes.
Who employs affiliate marketing?
Affiliate marketing tactics are used most frequently by online retailers.
Amazon.com is one of the biggest names in affiliate marketing (See also E-Commerce Marketing). Its program was one of the first major affiliate marketing campaigns developed, and became a model for other companies’ subsequent campaigns. The advent of Google and LinkShare enabled affiliate marketing to extend to a higher variety of website publishers at all levels of traffic. Thus, a blogger might serve as an affiliate for a multi-million dollar company.
Because of the affiliate website’s commission, the profit margin on products sold is lower, but total volume of sales tends to be higher. Products that particularly benefit from high exposure, such as books and music, are good candidates for an affiliate marketing strategy. Entertainment, and particularly gaming, has also experienced growth through such marketing. Other business sectors that are growing through affiliate marketing include finance, travel, and mobile-phone sales.
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Related Blog: Affiliate Marketing Strategies and Idea’s