Affiliate Marketing

The Internet is the perfect medium for direct marketers, because it's all about direct, immediate and trackable interactions with customers. Experienced direct marketers, well-versed in efficient customer acquisition, brand building, database marketing, fulfillment, and customer service, are uniquely positioned to take on the challenges and exploit the benefits that e-commerce presents. Direct marketers also realize that the Web is different than other media, for both marketing and selling. The chaotic and dispersed nature of the Web sometimes makes it seem to be an inherently indirect medium. The first major challenge in the move to the Web is getting customers to visit sites. Since the marketer cannot send his site to them like a catalog, he has to market the site to them to their front door, so to speak. To harness the power of the Web, and its millions of potential customers, affiliate marketing is gaining popularity as an advertising tool in this context.

In a few short years, affiliate marketing has become a significant force in how commerce on the web occurs. The concept behind this tool remains simple. It allows you to buy targeted traffic to your site. Affiliate target marketing is a very inexpensive means for companies to ensure that their advertising expenditure is only for "targeted" recipients they only pay when the customer (or potential customer) has gone to the trouble to come to them. An affiliate marketer is someone who actively promotes the products or services of one or more businesses, and receives commissions on sales generated through his/her referrals. When it comes to the web, Amazon.com, USA really started the affiliate ball rolling. In July 1996, it launched its "associates" programmeand now counts over 450,000 sites in its network. The basic model works something like this: A small website owner registers with Amazon (or any other affiliate program), she then puts various links, banners, and products on her web site. When her visitors click through on these links and purchase a book or other product, the small web site owner is paid a commission for generating the sale. In all cases, the goal is for marketers to only spend money when their particular performance objective is met. While Amazon only pays when a sale is made, merchants selling big ticket items like cars, or marketing services like credit cards, have modified the model paying instead for clicks or qualified leads. In fact, compensation schemes are as varied as the merchants themselves from a 15 percent commission on Amazon books, to 1 percent on Dell PCs.
What Doesn't Work
Same Old Banner Ads
Affiliate programmes are a way to increase CPM and fill dead ad space with results-based advertising. But affiliate programmes that fail to use direct response banner ads suffer the same fate as any old banner ad. The key is in improving the creative and putting in a simple call to action for one product.
Low Margin Products
Imagine going out into the brick and mortar world, inviting someone to sell your Rs. 50,000 product, yet paying them only Rs 500. Affiliates are the sales force an asset; many companies pay pitiful margins, rarely write checks, and then wonder why their affiliate programmeis flopping.
Counting Affiliates Like Hits
Many programmes brag about the thousands of affiliates they have. Meanwhile they do nothing to promote them. Having lots of affiliates is good, but having lots of successful affiliates is even better.
No Guidance, No Training, No Activity
With many affiliate programmes, you never hear from them again after signing up. Sales training is critical to success. Without training, affiliates will do whatever they want, which wastes time and money.
Shopping Cart Mania
Huge Product Selections Overwhelm Potential Buyers Some affiliate programmes drive people to a shopping section filled with thousands of items for sale. The overwhelming volume of choices undermines sales.