What is Affiliate Marketing?

Copyright (c) 2008 Colin Meunier

The Internet has grown in leaps and bounds over the past few years. From only an information and research portal, it is grown to be a complete business model. In fact, every company and individual that wishes to stay in the market say ten years from now will be forced to include a proper business plan for e-commerce today.

One business that has actually taken the Internet by storm is affiliate marketing. Affiliate marketing is of the safest and simplest business models over the Internet. Affiliate marketing simply means a business pays out or rewards one or more of its affiliates for spreading the word or marketing their product. This is a kind of revenue sharing between the manufacturer/dealer and the affiliate. Affiliate marketing, therefore is the action of building and diverting traffic and therefore potential buyers via a website or a group of websites to the main seller of the product. Affiliate marketing is a very good idea for anyone with a website and a respectable amount of traffic.

Affiliate marketing first made its foray into the Internet with the website CDNow.com. It was the first website to believe that there could be money for everyone if there was a module which would allow other music based websites to have a link to the products sold by CDNow.com on their website.

There are basically two or three types of payment modules under affiliate marketing. One of the most famous is the Pay Per Click (PPC), which pays the advertiser a certain amount only when the website user actually clicks and visits the website of the product advertised. Another, more difficult method is the Cost Per Sale (CPS), which paid a set amount to the advertiser only when the website user would click, visit and actually buy the product. Due to obvious reasons, the amount paid under the Pay Per Sale scheme was the highest when compared to the other affiliate programming plans. Not many affiliate business use Pay Per Click or Cost Per Mille today. Most affiliate marketing programs today use the revenue sharing model, or the Pay Per Sale model.

Affiliate marketing has had its fair share of issues ever since it first started out, and these issues are too huge to be ignored. For example, one of the first issues. Affiliate marketing experienced was the so-called 'Click Fraud' from some of the affiliate websites. These websites would create such a situation that the website user would unwittingly click on the affiliate link.

Spam is another aspect that has hit Affiliate marketing ever since the time affiliate marketing made an entry. Many Affiliate Merchants have now made it mandatory for their affiliate marketers not to resort to spam for advertising their product.

Spyware is another internet bad that has created problems for affiliate marketing. Due to spyware, many a affiliate merchant and therefore their affiliate marketers have earned a bad name. However, they have not geared up to the Internet world and almost none of the affiliate marketers have resorted to spyware and adware.