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For an amazing glimpse into how a creative internet marketer uses affiliate advertising, and several other promotional techniques discussed in our Easy Website Primer (as well as some that aren't) download this free ebook The Ultimate SuperTip by Harvey Segal.

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That is not a sufficient reason for you to purchase anything you see here!

If you don’t care to check out these links, that's O.K. too.

Affiliate Links

Affiliate advertising - how is it different?

Affiliate advertising is much like other forms of advertising which you might display on your web pages. But the relationship between you and the advertising merchant is rather different.

In an affiliate program, you partner the merchant. Your job is to find qualified leads or prospects for the merchant's products through your website, and pass those prospects through to his website, via your affiliate link.

His job is to supply great products and convert the prospects you send him into customers.

In this relationship, you are known as the affiliate.

How affiliate links reward the website owner

If your prospect buys something, the merchant pays you a commission. If your prospect buys nothing, you get nothing. This is known as Cost per Action (CPA) or sometimes Pay per Action (PPA).

Commissions range from 5% to 75% of the total costs of the goods purchased. In the case of physical products that have to be manufactured, packed and shipped, commissions are usually at the lower end of this scale.

For products such as ebooks and downloadable software, commissions are often at the higher end of the scale, averaging around 50%.

Start by opening an affiliate account

With affiliate marketing, there is no advertising network making sure that the advertisement will appeal to your web visitor. You do that work yourself, by choosing to affiliate with merchants whose products complement the topic of your web page.

Merchants who offer an affiliate program generally have a link on their website labeled "Affiliate", "Partners" or suchlike. It's often right at the bottom of the page. Click on that link and then register with the merchant to create an affiliate account.

The merchant allocates a unique code to your account. He'll use this to identify which leads come from you.

Using an affiliate network

Many merchants deal with affiliates through an intermediary known as an affiliate network. Examples of these are Amazon, Commission Junction and Clickbank. There are many others. The affiliate opens one account with the affiliate network and then applies through the network to sell individual merchant's products.

The network keeps track of all sales by their affiliates, and pays them directly.

Many affiliates pursue their business exclusively through such networks rather than dealing with individual merchants. The better networks have earned a high level of trust from both merchants and affiliates.

For affiliates, they also offer the benefit of a wide range of affiliate products under one umbrella, reducing the administrative burden and making it easy to keep track of commissions earned from multiple sources.

The affiliate network's fee usually takes the form of an additional commission on each affiliate sale, paid by the merchant.

Tracking returning prospects

Depending on his terms and software, the merchant may be able to track prospects that you send to his website even if they don't buy straight away. Perhaps they bookmark his site and return a month later and buy something.

With a good affiliate program you would still get the commission.

Affiliate programs vary widely in their ability to track returning prospects. It's worth finding out how your merchant handles that situation. How long after the initial visit will he still remember that your affiliate link was the source of his lead?

Affiliate links

Most merchants who offer an affiliate program will allow you to choose the format of each affiliate link to his website, either a button or a banner or a text link. For each link, the merchant supplies you with javascript or HTML code to copy and paste into your web pages' HTML, which causes the button or banner or text to appear in your web page.

Each affiliate link includes your unique account number, either in plain view, or encrypted for better security. (The affiliate account number can be seen by the visitor to your webpage, and could potentially be altered by him, if not encrypted.)

Affiliate Terms

You can withdraw from an affiliate relationship by removing this code from your web page. Generally the terms of the agreement allow termination by either party for any reason, or no reason. You'll want to read the agreement carefully.

Some affiliate programs will also pay commission to you if you introduce another website publisher who signs up as an affiliate advertiser with your merchant. This is known as a two-tier program. Usually, the merchant pays you a small commission on sales that result from the other website's leads.

With some affiliate programs, money owed to the website owner is only paid after 30, 60 or 90 days, so ask about that.

Affiliate advertising - more risk for greater reward

Affiliate advertising offers benefits to both parties. The website publisher has a chance to improve her earnings (but with the risk of zero earnings if the prospects don't buy).

The merchant can be sure of his selling costs. He doesn't have to bear the cost of any ineffective advertising. He doesn't even pay for prospects sent to his website - unless they buy from him. All the risk is borne by the website owner.

The website owner also carries a risk when dealing with an unknown merchant. The merchant may fail to properly account for sales, or fail to pay commission. These risks can be managed by dealing with reputable merchants or through an affiliate network. But merchants who are not well known may offer the largest commissions.

To find the best known and respected affiliate programs, consult one of the online affiliate program directories. See Links / Resources.

Despite the growing popularity of affiliate marketing programs, the basic idea is an old one, pioneered by Amazon and others (in the last century!)

Not all affiliate programs are equal

The boundaries between affiliate advertising and other forms of website advertising can be somewhat blurred. Some affiliate merchants pay according to how often their advert is displayed (CPI), or by how many clicks are recorded on their affiliate link (CPC), instead of paying a commission on sales only.

By some definitions, even Google Adsense would be regarded as an affiliate marketing program. That's no problem. Just make sure you understand what is being offered in each case.

Look for affiliate programs that pay well, have good products to sell - which are compatible with your web page - and have a professional, persuasive website. (In internet marketing jargon, they "convert well".) No sense in sending them all your traffic if they don't seem to know how to close the sale.

On this page are examples of affiliate advertisements, so that you can see how they work. If you click on these advertisements, you will see what lies behind them, generally a selling page on the merchant's website, with lots of 'hype' and persuasive copy. This doesn't mean that the products are bad. Sometimes it takes persuasive copy to sell the product, especially digital products.

You don't have to create those selling pages. The merchant will have done that for you. You just put the advert onto your web page. It sounds really easy, doesn't it? It can be, especially if you choose products which match your visitors' profile. That's the first challenge.

The hardest part is getting traffic to your web page, and we've already covered several ways of doing that. (See our Build Traffic tutorials).

Now we leave affiliate advertising and move on to our next tutorial: Selling digital products (egoods) from your website.

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Links / Resources

Web advertising terminology:

CPA= Cost per Action

CPC= Cost per Click

CPI = Cost per Impression (or view)

CPM=Cost per Mille (thousand impressions)

Some well-known affiliate networks:

Pepperjam

Linkshare

Affiliate bot

Clickbank

Commission Junction

Affiliate program directories:

Affiliate programs directory

Associate programs

More articles on affiliate advertising:

Wikipedia: Affiliate marketing

Sitesell: Affiliate masters course

Choosing affiliate programs

How super-affiliates choose their top affiliate program

10 Best affiliate programs

The truth about affiliate programs

Make Money: Affiliate Advertising Top Prev Next: Sell ebooks, esoftware, egoods

Affiliate links can increase your website advertising income