Making Affiliate Program Networks Do The Job For You
Affiliate programs are the ways and tools by which online merchants earn profit. These programs are hosted by online merchants but advertised by web publishers. Affiliate network is the conglomeration of web publishers and online merchants. The merchants pay a portion of their profit to the website publisher when an end user performs a certain action or completes a transaction that leads to income for the online merchant.
The idea of affiliate programs was launched in November 1994 by CDNOW when they launched their BuyWeb service. It was based on the idea that music oriented websites could list albums and evaluate those that the users might be interested to purchase. These websites would also give links to CDNOW web site where users could place their purchases for the music CDs.
One of the better and more commonly known examples of affiliate program usage is the website Amazon. Amazon started their affiliate program in July 1996. The associates could place a link or banner on their websites and if the purchase was made the associate was paid. Commissions for affiliate programs is done by using Cost per Sale or CPS as a compensation method. Almost 80% of all transactions are done using this. More or less 19 % use CPA or Cost Per Action. In these methods the affiliate or the advertiser must make sure that the visitor to the main host site has converted and makes an order.
A new concept in the world of affiliate program network is the multi-tier system. It involves distributing commission using hierarchical referral network of enrollees and sub associates. At most two tier programs exist but almost all of the affiliate programs are still single tier. A few web merchants use in house affiliate programs using popular software while a few merchants prefer to go through third party services. The third party services are usually preferred as they are unbiased in judging traffic and sales. Based upon the choice of service used payment is done by merchants themselves or by a third party or affiliate networks on behalf of the merchant.
Now coming to the most interesting part of affiliate programs. How to choose an affiliate program for a target web site? There are basically three ways by which you can find a related affiliate program. First and the foremost is the affiliate program directories. These are a type of guide to pre-screened affiliate programs and comprises of affiliate discussion forums, blogs and beginner tools. The next way is to use vast affiliate networks that provide the system for thousands of advertisers. This is usually a good way to begin to get the hang of things. Third and the most economical way is to use the target website itself. In general target websites contain a link titled affiliate program that offers direct affiliate programs, but you have to be experienced enough to know which one would work out the right for you.
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