In short, it is “a way for a company to sell its products by signing up individuals or companies (“affiliates”) who market the company’s products for a commission” (entrepreneur.com).
Brands can work directly with Affiliates, managing the network in-house or also promote their offers to a network that Affiliates belong to, which acts as a kind of third-party.
Affiliates can be very diverse going from sites and blogs to directories and search engines. Their marketing initiatives can also range from email marketing, to banners and ads and everything in between.
Compensation methods are diverse and can go from more traditional revenue sharing and pay-per-sale to CPC and CPM.
Benefits of Affiliate Marketing
For a brand – Affiliate Marketing is a great way to expand their marketing initiatives and tap into markets that would otherwise be hard to reach. By rewarding Affiliates financially, you can develop a trusted network of “partners” that are marketing your products to their network for you. If your marketing resources are limited, Affiliates act as an extension of your brand and have a real incentive to get your products sold, since they get a share of the revenue. Also, because of the different types of Affiliates and the methods used, it is a great way to diversify your outreach.
Becoming an Affiliate – It’s all about getting extra revenue and meeting your audience or customers’ needs. They trust you and are always looking for great new products. You can easily expand your offering at no upfront cost and get rewarded financially by your partners.
Trends in Affiliate Marketing
Affiliate Marketing is constantly changing as technology and practices evolve. Here are some of the trends that we have seen so far in 2014 that are here to stay:
Internationalization – Increasing number of companies now working with networks internationally and increasing volume of overseas traffic.
Mobile – As sites are being optimized for mobile traffic, so are mobile offerings in Affiliate Marketing. The ability to track users by device and location also allows a more targeted and customized offering. This will also help grow local Affiliate Marketing.
Pricing – Diversification of pricing models, as offerings get more diverse and complex, and cross-tracking consumers who own multiple devices helps gather more data.