A brief history of affiliate marketing, the compensation models and how to operate an affiliate program via affiliate networks, in-house and outsourced program management.
Part 2 of 2
Affiliate Networks
Operating an affiliate program to drive traffic to your website has never been easier. Most Sites utilize 3rd Party Services (so called Affiliate Networks). Those Services provide the infrastructure for you to track all the traffic and referrals to your Website.
Networks also work as a Recruiting Platform to find Websites willing to promote your Products or Services. The Integration of their Service usually takes just a few days or sometimes just a few hours.
Some of the Networks also help you to keep the generated overhead low (such as Payment of the Affiliates).
Networks usually charge 20-30% of the commission you pay to Affiliates as Fee to you. If the Fee is 25% for example and you pay 10% commission per Sale to you Affiliate, you must pay $12.5 in commission and fee for a $100 Sale.
In-House Affiliate Program Solutions and SoftwareYou might want to have more control over your Affiliate Program and avoid the Network fees by running the program In-House.
You can, of course, develop all the necessary tools and technology by yourself, but that is may be not very cost effective and not as easy as it seems.
The technology has already been developed by various Affiliate Tracking Solution Providers and Software Packages.
They are most of the time easy to plug into your existing Sites and have already proven themselves. Be carefull with too small or too new Solution and Software Provoiders.
Check the Background of the Company you consider first. Do your diligence!Outsourcing - Outsourced Program Management (OPM)When you have your Program up and running, the first and important step was done. Now begins the complicated part starts.
The Wild West of Affiliate Marketing when quick and easy money was made and having an Affiliate Program running on "Auto Drive" generated a huge increase in sales by affiliates that seeked out programs and did everything themselves without the need of support and guidance is over. Business on the internet matured and Affiliate Marketing as well.
An Affiliate Program requires attention.
To get active and quality affiliates requires active recruitment efforts. Support of existing affiliates also became vital. A clear set of Rules, the Affiliate Agreement, must be worked out and be enforced.
Allocate Resources to the program and don't do it on the side.
Your program is destined to fail if you don't spend the required resources and time for your program.
If you don't have the resources in-house, consider outsourcing of your program management (OPM). There are today a number of quality service companies available that are specialized in this.
ConclusionThousands of Websites operating their Affiliate Program successfully today, prove, that Affiliate Marketing is the most cost effective and efficient way to promote your products and services on the World Wide Web.
Affiliate Marketing guarantees a fast ROI (Return of Investment) and for some Online Merchants and Services are the Sales generated through the Affiliate Channel making up a considerable percentage of their total online Revenue.
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