Affiliate Program Series Part 1: What do you need to get started?

Hostway Tech Team Hostway Tech Team - August 03, 2010

By Meredith Barnhill

Affiliate marketing—when independent bloggers or companies get compensated for endorsing products or services by another company—is a way for online companies to advertise their products and boost revenue without spending money for an in-depth advertising campaign. Not only does your business gain credibility by being recommended by other Web sites and companies, but it also helps your business reach more prospective clients in a wider range of audiences.

What is Affiliate Marketing?

Affiliate marketing is the practice of compensating individuals or businesses who market your product through advertisements, advertorials or links to your product or Web site. These affiliates can be individuals who blog or manage Web sites for particular communities, such as the partnership between Food Renegade and Real Food Media—a blog network promoting nutrient-dense, sustainable food. Food Renegade has a resources page that endorses their sponsors and mentions that the paid advertisements help support the blog.

Other marketing techniques include the user hosting click-through links to particular companies or products. Content-driven and review sites, like Gizmodo and CNet, can write advertorials—the print realm’s version of an infomercial—to generate interest in a particular business’s products.

Forming Partnerships

If you have an ecommerce site and want to start your own affiliate program, there are a few minor steps to take before opening registration. First, you must decide on the method of compensation, either through commissions based on sales of that particular product, payment for generating leads (visitors to your Web site) or if you pay users for each person who clicks-through to your Web site.

Amazon.com’s affiliate program is one of the most popular programs and illustrates corporations paying individuals for each product they sell. Users can refer clients to Amazon’s products and will receive 15% of whatever “qualifying purchases” that users makes through Amazon.com.

Whichever method of compensation you choose, you must have a way to analyze traffic statistics to your site to ensure adequate payment. Traffic analytic software like Omnistar can help you manage your data, but can be confusing, costly and time-consuming. Third-party affiliate management companies, like Commerce Management Consulting, can offer comprehensive solutions, but have some cost to them, too.

If you have a small site or don’t want to start and manage your own affiliate program, you can sign up for an affiliate network to find and manage your marketing affiliates. Affiliate networks help match potential affiliates with relevant companies and track analytics for you. ShareASale is an example of an affiliate network and features a database of Web sites willing to host advertising and click-through links for your business.

Issues

Affiliate marketing works best when your affiliates are credible and positive about your products and don’t try to inundate their audience with advertising your product. Properly researching your potential affiliates and their online presence will help you identify good matches for your business. Avoid affiliates who spam their audience or whose content isn’t compelling to your target market. Also, make sure to choose affiliates who have a large following and appeal to your desired demographic.

Developing a code of conduct is the best way to avoid these issues and to guarantee the best results.

Read the full Affiliate Program Series here:
Part 1: What do you need to get started?
Part 2: Incentives to Sell
Part 3: Bestsellers

About the Author

Meredith Barnhill is a multimedia journalist in Austin, TX.

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