What Is Affiliate Marketing
Affiliate marketing is an exercise in revenue sharing, where a company pays someone a commission in exchange for referred business. The concept itself has been around for ages. Thanks to advances in e-commerce and digital technology, it has now evolved into a dynamic industry.
How does it work?
Pay-per-click (PPC) sees a company pay a commission for each visitor that clicks through to their website from an affiliate’s website. PPC also generates higher commission levels for affiliates. Companies must pay a commission, whether visitors buy a product or not. Consequently, PPC affiliate programs offer relatively low commissions.
Another type of affiliate marketing is pay-per-lead (PPL). This structure offers affiliates a commission depending on referred visitors registering for a newsletter or a trial offer.
Finally, pay-per-sale (PPS) sees an affiliate rewarded with a commission for each referred visitor that goes on to purchase goods from a merchant. This method typically offers the best value-for-money for companies and higher commissions for registered affiliates.
How can your small business use affiliate marketing?
As a small business owner, you can take advantage of affiliate marketing in two ways. You can either set up an affiliate program to generate sales for your business. Or you can register for an existing affiliate program and generate leads for another company and generate a small, passive income for your own business.
It’s easy to launch an affiliate marketing program for your own small business. If you are hosted by a platform like WordPress or Shopify, there are plenty of downloadable apps that sign up affiliates, track referrals and pay necessary commissions.
If you’re not so keen on managing an affiliate marketing program, you can hire a specialist agency. The agency can design and manage a program for you. Just be sure to do your homework and shop around.
Your small business can also get involved in affiliate marketing by joining an existing program like Amazon Associates and Google AdSense as an affiliate. Existing programs offer straight-forward models that can provide you with a steady stream of passive income each month.
Simply by allowing certain ads to be displayed on your website. These programs also give you control over the displayed ads on your website. So you won’t need to worry about inadvertently displaying the ads of competitors.
SOURCE: Small Business Trends
