In today’s digital age, you may have heard the term “affiliate marketing.” But what exactly is this type of marketing, how does it work and what makes it important? In the next array of articles, we will answer all of these questions. For now, let’s take a look at this introduction to affiliate marketing.

What to Expect from the Next Series of Articles:

  • Learn how affiliate marketing works
  • Discover different actions and rewards with this type of marketing
  • How tracking with affiliate marketing works
  • Tools of the trade for affiliate marketing
  • How to create a set up for an affiliate marketing campaign
  • Pros and cons of affiliate marketing
  • The crucial elements that make up a successful affiliate marketing program
  • How to run your own affiliate marketing program
  • Which tools and resources you need to sell your products through an affiliate

What is Affiliate Marketing?

Affiliate marketing is another type of marketing strategy. It occurs when a third-party recommends products or services on behalf of a merchant. In return, the third-party will earn a commission for every deal. They can also earn from leads.

Most of the time, affiliates are considered as an extended sales force for a business or a website. It’s a reward-system that can help both parties earn income and generate sales. 

Who Benefits from Affiliate Marketing?

In affiliate marketing, both the business or the brand and the affiliate marketer earns money. Before someone becomes an affiliate, they go into an agreement with the business on how much commission they will earn. 

Affiliates can earn a percentage of the sales, or they can have a monthly income based on their quota. It all depends on the negotiation between the brand and the affiliate.

The idea is to promote other people’s products through an affiliate network. In turn, affiliates will earn a commision if they make sales for the business. 

Moreover, businesses also benefit from this type of marketing. For instance, if you have a product and want to create more sales, you can hire affiliates to promote your product for you. 

If you’re not a business and you want to make money, you can promote a product and earn income as an affiliate. It’s all a circle.

Every business can have a program for affiliate marketing. The best part is, businesses don’t have to be vigorously entangled in marketing development. They just need to have a product for the affiliate to sell. 

Who are the Affiliates?

Now, anyone can be an affiliate marketer or publisher. It can be an individual looking for some passive income. Or sometimes even entire companies. 

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How Much Do Affiliates Earn from Affiliate Marketing?

The earnings of an affiliate depend on how much sales they can generate for the business or the merchant. It usually ranges from a hundred dollars up to millions of dollars every month.

Common Terminologies in Affiliate Marketing

Now that we have the basics covered, let’s talk about the basic terminologies used in affiliate marketing. Take note of these terminologies because you will see us use these a lot in the next series of articles. 

Action

This refers to a specified task completed by a potential customer or a user. The action of a user results in the awarding of commission to the affiliate. 

It is important to keep in mind that actions can vary. And it can include a purchase of a product or a service, filling up a form or a survey, or even something as simple as signing up for a newsletter. 

Affiliate or Publisher

This refers to an individual or a third-party company who markets the product of the merchant.

Merchant or seller 

This refers to the individual or the company who creates or manufactures the product

Clickthrough 

This refers to the click on a URL or a link that leads to another web page or website.

Commission 

This is the fee that an affiliate or publisher earns after they make a successful referral.

Cookie or Cookies 

This refers to data sent to a web browser. It comes from a server. Cookies are then sent back untouched by the browser every time it connects to that server. This is used for tracking user data. It’s also used for validating, and managing specific information about users. 

Web browsers use cookies to understand a user’s site predilection. They also use it to understand the contents of their shopping carts online. Cookies make it easier for marketers and businesses to target potential customers too. 

Revenue share 

This refers to the commission arrangement where the affiliate gets paid a percentage of a purchase.

Cost per Action 

This refers to the money paid when a user completes an individual task. We also discussed this in a previous article.

Cost per Click 

Also known as the CPC, this refers to money or cash value payment when a a potential customer clicks a link.

Cost per Lead or the CPL 

This refers to the commission arrangement where the affiliate receives a fixed fee. The fee is for a lead that the publisher sends to the business or the merchant.

Session 

Every minute a web browser spends on a website is referred to as a session. In order for the time spent to be considered as a “session”, it must come from a visitor with a unique cookie. 

Merchant or the Business Owner 

Refers to the owner of the advertised or endorsed service or product.

Traffic 

This refers to the number of users that goes to a web page. 

Referrer 

The referrer can be an individual or a marketer. It is where publishers advertise the merchant’s product.

Most web browsers log the referrer’s URL in the referrer sequence. This data is crucial in deciding which queries are being used to find different sites.

Universal Resource Locator 

This is the website’s URL, browsers and servers use this as a locator.  

What’s Next?

These are the most common vocabulary used in affiliate marketing. In the next article, we will talk about The Building Blocks of Affiliate Marketing. We will also talk about how to set up an affiliate marketing campaign. 

We hope that this article has helped you better figure out what affiliate marketing is. Don’t forget to keep reviewing this article as we continue our discussion about affiliate marketing. See you at the next one!

© Image credits to Anni Roenkae

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