Introduction to Affiliate Marketing Programs

by Octavian P Jurma, AlphaTotal.com

     Contents:
 

   This introduction is a synthetic review of current concepts in Internet Affiliate Marketing. It is by no mean exhaustive and I expect some use of terms and definitions might stir violent opposition. Feel free to quote this article in whole or in part as long as you maintain the link to our site as reference, a regular academic convention. Please contact me  for any suggestions or comments.

    

There are two ways to make honest money in life. The most common is to work for money. This helps you get along. The other way is to have the money work for you. This helps you be free. The Internet and the World Wide Web (or Web) offers ample opportunity for both. Therefore when you choose your affiliate program pay close attention to what kind of relationship you establish with you partner.

What is MARKETING?

    To make money, you need first to understand that ALL money come from selling or trading. No matter what you do, if you make money you are selling something. An employee sells his/hers time, a business sells goods and/or services and so forth. Even artists or manufacturers eventually need to sell their work to survive. Most commonly in a business relationship you either sell something or you help somebody sell something.

MARKETING: is defined by the Merriam-Webster Dictionary as "an aggregate of functions involved in moving goods from producer to consumer". We might add services to this definition. The main resource required for any form of marketing is information, and at the hearth of marketing is a specialized branch of the information producing and delivery business.  The advent of new technologies, especially the Internet, and the possibility for the consumer or end-user to get involved in this process, has transformed the marketing landscape in a complex and difficult to classify environment.

Taking into consideration the above, relative to the consumer involvement,  we can differentiate three major types of marketing:

1. Unsolicited Marketing (UM) similar to Advertising or Professional Marketing
    These programs are also known as advertising and deliver message to large populations. They are the most common form of marketing and essential for creating a brand and brand awareness. Effective in moving products customers are already educated about. Spam and junk mail enter in this category and the resentment we feel about them only underlines the natural resistance we have to this form of marketing. Advertising is tolerated when is well executed and is perceived as a "payment substitute" such as a "free TV" channel, which is in fact paid by advertisers.

2. Referral Marketing (RM) similar to Affiliate Marketing or Associate Marketing (see bellow)
    These programs are also known as word of mouth advertising. They are the most effective form of moving products or services that require education or special instruction. They can be as annoying as spam and junk mail when people who benefit form the product sale are "selling" instead of informing or educating

3. Solicited Marketing (SM) similar to Permission Marketing, Consumer Marketing or OPT-IN Marketing. They are a form of CONSUMER SELF-MARKETING.
    These are programs where a consumer solicits some information and require the acceptance of the user to be exposed to various forms of advertising. In many cases there are some forms of rewards for the time and attention spent.

    Any type of Marketing can include Revenue Sharing Programs (RSPs) among the functions that define a certain Marketing Strategy for any particular site, however RSPs are the core of the Referral and Solicited type of programs. Many of the serious web sites on the Internet will share some of the revenues with you if you help them increase these revenues. Some are more generous than others and there is a maze of forms of partnerships. 

What is AFFILIATE MARKETING?

AFFILIATE (or ASSOCIATE): According to Merriam-Webster Dictionary, affiliate means "to bring or receive into close connection as a member or branch" or "to associate as a member". On the Internet and affiliate or associate has become synonymous with a web site that promotes another site for financial profit or reference. 

AFFILIATE (or ASSOCIATE) MARKETING: can therefore be defined as a form of Referral Marketing (RM) in which two sites are in a business relationship that is build around some type or types of  Revenue Sharing Program (RSP). In other words where a site pays another site for sending customers their way. Any site can have at one moment many referral links coming in and/or going out, thus adding to the ever increasing complexity of the World Wide Web.

PARTNERSHIP PROGRAMS: Are Affiliate Programs that pay a percentage commissions (more about payment structure in our next chapter) for the life of a client. Such affiliates are known as partners or super-affiliates. These programs create the possibility of generating residual (recurring) income and are frequently used by Affiliate Networks and Adult Networks and Sites to avoid fraud and create loyalties. 

AFFILIATE MARKETING is also known or defined as  NETWORK MARKETING especially off-line or as INTERNETWORK MARKETING for newer programs that have migrated on-line such as those used extremely successfully by QuixtarTM. 

So this is the theory. Let's now look at some common types of affiliate marketing programs. Understanding the advantages and disadvantages of each is critical to set up a profitable affiliate system of links on your web site.

To help you (and us) we have classified the  in the following categories based on their payment structure:

Single-tier affiliate programs
Multiple-tier affiliate programs

Learn more about  the Classification and Types of Affiliate Marketing Programs.

Types of Affiliate Marketing Programs