Pay-For-Performance Affiliate Networks Are Easy On Your Advertising Budget

Affiliate marketing is one of the best ways to spend your marketing dollars. It is called pay-for-performance marketing. You as an online store owner or service provider only pay affiliates that bring traffic and customer sales to your site.

How An Affiliate Network Works?

Affiliate networking consists of an affiliate, an advertiser, and the back-office software or service to manage the program.

- Affiliate Program or Network. The affiliate network or software provides the necessary affiliate tools and services to manage the affiliate relationship and even provide back-office functions such as fraud control, reporting, and issuing checks to affiliates. Most affiliate management programs also integrate with most shopping cart software. Most affiliate programs provide multiple pay-for-performance options to include pay-per-sale, pay-per-lead, and pay-for-click.

- The Affiliate. Affiliates are basically independent contractors providing marketing services to your business. The affiliate provides links from his site to your site. This link could be a text link or banner ad highlighting the benefits of your product or service. The affiliate program usually generates an unique link for each affiliate. The unique link is used to track visitors, and it sets a cookie to follow the visitor until a sale is made or the agreed-upon performance (sales, lead, click) occurs as a result of the affiliate link.

- The Advertiser. The advertiser can be any size business. The advertiser either buys and manages his own affiliate program, joins an affiliate network, or outsources the entire affiliate management process. There are various degrees of up-front costs as well as monthly costs. Most internet-savy businesses have an affiliate program because it is the best Return-On-Investment (ROI) for most business models.

Challenges of Using An Affiliate Network.

There can be many challenges to an affiliate marketing program. Many of these challenges can be mitigated by following best business practices and using the appropriate affiliate management tools. This can include an affiliate network, affiliate software program, or using an outsourcing partner to manage your program. Challenges include: drawing up contract between advertiser and affiliate, application form, links and banners, affiliate training, affiliate tracking and fraud control, affiliate newsletter, paying affiliates, affiliate recruiting, and tech support.

Benefits of Affiliate Marketing.

There are major benefits of having an affiliate marketing program. Advantages include:

- Pay Only When Affiliate Traffic Generates A Sale. Pay-For-Performance marketing is becoming the norm on the Internet. This is a lot different from a newspaper ad or direct mail. With traditional advertising you pay most of your marketing costs up-front whether the advertisement does well or not. With affiliate marketing, you pay most of your costs only when a sale is made.

- Immediate Feedback and Limited Costs With Under-Performing Marketing Campaigns. With affiliate marketing, you get immediate and specific feedback on your marketing campaigns. If a banner ad or text link does not perform, you can change it quickly. You also do not have to pay much for a poor-performing ad campaign as most of the costs are based on performance - no sale, no commission.

- Link Popularity Increase Rankings On Search Engines Resulting In Free Traffic. Many search engines such as Google rank sites by the number of quality links that are coming into a web site. If your affiliate program has a hundred or thousands of affiliates, these affiliate links will increase your link popularity on search engines. This will result in your web site being placed higher in search engine results that then generates free traffic for your site.