My OperaOnline income Affiliate Network - Four Main Structures
Sunday, June 27, 2010 9:52:20 PM
The internet has come a long way since its early days. This has lead to more individuals turning to the internet to generate additional revenue streams. Many of these new internet marketers have discovered that an affiliate network is the place for an individual with no products or services of their own to sell. Basically, an affiliate network is an online venue who brings advertisers into contact with internet marketers, also known as affiliates, to market their products in exchange for a commission. Such an exchange is common what is referred to as affiliate marketing.
Affiliate marketing presents a win-win situation for both advertisers and affiliates. In the case of the affiliate, they do not have the headache of trying to develop a new product or service which is marketable to a particular niche. In the case of the advertiser, they do not have to search for their next buyer. Furthermore, affiliates are only paid once they perform a particular action. The affiliate network comes in and accepts payments from buyers, tracks who is owed what for each sale, and makes sure that payments are made in a timely fashion. One thing that you should be aware of, is that there are different compensation structures when is comes to affiliate programs. The structure will dictate how you as an affiliate will be paid.
Hereafter, we will discuss four of the most widely utilized compensation methods of affiliate marketing:
1. Cost Per Sale or CPS: Cost per sale is a very straight forward method of affiliate marketing. There are rarely any misunderstanding which are not self-inflicted with this means of compensation. Essentially, affiliates are provided with a tracking link which is unique to them. If the product or service is being promoted via an affiliate network, this link will be provided by the network. Otherwise, it will be provided by the advertiser themselves. Each time a sales is made through the affiliate's link, the affiliate receives credit for a conversion, and a predetermined commission is allocated to that affiliate's account. The term "Cost Per Sale" refers to the expense which is incurred by the advertiser for the sale. Thus, if a product is $30 total, and the affiliate is compensated $18 for each sale, the CPS would equal $18. However, one thing that you should notice is that the advertiser only pays an affiliate for sales which are made, meaning that the advertiser too is making money. This is a great structure for advertisers who do not have the bandwidth sink money into advertising which might not produce results.
2. Cost Per Action or CPA: This is more of a catchall compensation structure. The reason being that the cost of the conversion depends upon the specific agreed upon action between affiliate and advertiser. Therefore, the other three major forms of compensation can fit within this model depending on the predetermined action. The action can be a sale, a subscription, or a click. It is really determined by the agreement of the two parties.
3. Cost Per Mille or CPM: This is actually used quite frequently by affiliate networks. Basically, for every 1000 visitors sent to an advertiser's website by an affiliate, the affiliate is compensated in a predetermined amount. Many larger advertisers utilize this method.
4. Pay Per Click or PPC: Usually when you hear of PPC, someone is referring to the programs offered by the search engines. However, did you know that there are also PPC programs offered by an affiliate network? How it works is that an affiliate network will host websites and blogs which belong to a myriad of niche markets. The advertiser then posts their ads on websites and blogs which fit their niche market, and pay a fee each time a visitor clicks on their link.
There you have it. The four most common affiliate network structures. Nonetheless, I must inform you that while affiliate programs can be very lucrative, you have to approach them in the right manner. Do not simply throw traffic at your unique link and hope for sales. The truth is that very few buyers make a sale on their first contact with your website. Thus, it is important to provide your visitors with an incentive to provide you with their email address, and build your customer list. Thereafter, you can market to your growing customer list for years to come.
Prior to committing to anAffiliate Network, you should determine the compensation structure. The fact of the matter is that many Affiliate Programs better lend themselves to a particular structure. This article covered the main four. Do not forget to check us out at SOSComplete.comOnline income: Online income
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