So, what is Affiliate Marketing?
| by: | |
 |
 |
| Andre Clements | Candice Grady |
If you are reading this you probably know what the Internet is, and you probably also know how important internet based marketing has become. It is for many businesses a primary medium through which to promote and sell products and services to clients around the world, 24×7x365.
In this post we dig into some of the fundamentals of what is arguably one of the most important aspects of internet based commerce, affiliate marketing. (This also happens to be our primary focus here at ForgeBusiness 
Online marketing may consists of various combinations of different techniques including:
- Affiliate Marketing
- Search Engine Optimization (SEO)
- Search Engine Marketing (SEM)
- Direct Response Marketing (DRM), e.g. Newsletters etc.
- Relationship Marketing, e.g. blogging, e-mail,
- Directories, link schemes
- Embedded Content Media e.g. Product & Brand Placement etc.
- Multi Level Marketing, e.g. referral ‘kick-backs' and ‘pyramid-schemes' etc.
- Various forms of unsolicited marketing communication, or spam
- and more…
As we pointed out earlier our focus is on affiliate marketing. We believe that in most cases it is the best way to establish a win-win marketing dynamic while capitalizing on some of the most important technological, commercial and cultural developments of our time.
New Media Age defines affiliate marketing as:
the process whereby an online merchant or advertiser recruits a network of other Web sites (affiliates) to drive traffic to its site. The affiliate then displays ads on its site and when a customer clicks through to the merchant site, the affiliate gets a commission…
Basically, it is a system geared around the internet and the idea of paying for results. Someone, called the affiliate, can choose to promote specific products from ‘merchants' who in turn are willing to pay for purchases or enquiries about their offerings. There may be no other link between the affiliate and the merchant other than the agreement to do exactly this. This means an affiliate can represent various merchants, and merchants' representation is not limited by the number of sales-people they can fit behind desks and counters in ‘brick-and-mortar' establishment or even afford to send out ‘on-the-road'.
This works particularly well were affiliates either serve a niche interest group and/or has established themselves as a trusted authority or subject-matter expert in a particular field. The radical speed at which such a marketing network can grow, or collapse and the economies of scale that can be achieved, or missed out on without efficient affiliate market management, is what makes affiliate marketing so important in our view.
In his Manifesto for Experimentation [http://www.changethis.com/pdf/30.06.Experimentation.pdf] Joseph Jaffe who is a marketing guru to the likes of MSN, Google, Reuters, CNET Networks and ESPN writes:
…the world has changed; the consumer has changed;
the organization has not. Technology is, or as, change agent. The consumer is changing,
but the marketing discipline resists or refuses to change.
The result is a disconnect. A gap. A chasm that has to be bridged…
In other words the marketplace is changing in ways that are significantly challenging conventional marketing disciplines. Competition is increasing across the field and ‘one-size-fits-all' approaches are increasingly being shunned by consumers.
As if evidence is required, take this observation by David Pogue [] of the New York Times in the context of CompUSA closing half of its 250 stores.
I think the real culprit behind the gutting of CompUSA is Internet pricing. You can order computers, accessories and electronics from the Web for a fraction of CompUSA's in-store prices–and evidently, most people are doing exactly that. (It's not just CompUSA, by the way.
Circuit City is closing 70 stores, too. And don't forget the 30-year-old Good Guys chain–46 electronics stores in California–which CompUSA bought in 2003 and then closed in 2005.)
Relevance, the degree of precision with which marketing messages are aimed to cut through the noise and clutter of the media landscape has become the name of the game.
Enter affiliate marketing campaigns, arguably the most exciting and perhaps even the most reliable way – if properly managed - to target and engage consumers, where they live. A way to start bridging the chasm Mr. Jaffe describes.
Our approach and offerings here at Forge offers a fantastic foundation to leverage the potential of online marketing. To borrow a phrase from a case study on affiliate marketing by Dennis L Duffy, it's like
having a large, independent, purely commissioned sales force…
Affiliates (also referred to as a publishers or partners) are paid only for actions that are performed (i.e. click, sales, subscription). It is in their interest to pursue effective communication and relevance in promoting offers to their audience. Often such publishers have remarkable insight into the needs and requirements of their audience which can translate into very persuasive promotions. It does also make it very important to support and service the requirements of the affiliates, as understandably excellent affiliate partners are in high demand.
To summarize how affiliate marketing works:
- The affiliates and merchants agree on what action the referred customer needs to perform in order for the affiliate to qualify for payment.
- The affiliate, a web site or newsletter publisher directs consumers to a merchants/advertisers site.
- The referred traffic is monitored.
- The affiliates get commissioned on a pay-per-performance basis.
- The merchant pays the affiliate for successful advertising.
- The merchant might provide the advertiser with data feeds, similar to detailed product catalogues that allows affiliates to select (manually or through automation) which products to promote and gives them access to media elements (often called ‘creative').
The principles are simple, achieving success in the affiliate marketing industry not necessarily. Merchants can outsource the affiliate marketing aspects of their marketing portfolio, or even specific aspects of their affiliate marketing activities. When outsourcing to an affiliate management solution, one of the primary concerns facing a merchant is whether or not their brand will be treated with its due respect. Forge Business researches and coordinates on behalf of the merchant. We ensure that the clients branding is effectively (and ethically) placed with appropriate affiliates/publishers for optimal results. We at Forge understand that merchants are often worried about being left out of the process affecting their brand; this is why we keep all our customers up to date and involved with fifteen day reports.
There are many affiliate programs and networks available today. Albeit, the number of programs heavily outweighs the number of experienced and/or capable affiliate managers. Very often people who may call themselves affiliate managers highly underestimate the competencies that are necessary for the operation of a thriving program. The managing of an affiliate program, make no mistake, is a full-time job that requires skilled staff!
Integrated performance marketing, is what we at ForgeBusiness are all about. We provide a safety net for those companies who wish to take advantage of the potentially very lucrative arena of e-commerce. Our approach and offerings are guided by our focus on results-driven affiliate marketing. This is a strategy that has allowed our clients the freedom to measure and assess their success while doing what they do best.
Affiliate marketing, when correctly managed, offers a fantastic opportunity to leverage the potential of online marketing. Call us!
March 9th, 2007 at 12:29 pm
Hmmmmmmmmm! Very impressive and informative, could you tell me more about the dashing miss Grady? If she works half as good as she looks, I would love to hear more about this affiliate marketing from her! Kind regards.
March 9th, 2007 at 2:35 pm
“…the world has changed; the consumer has changed;
the organization has not.” Well it seems that is changing ; ) and that you guys are making sure it does in all the right kinds of ways. Thanks for the nice clear explnantion of things - feel like I ‘get’ the picture better now.
March 10th, 2007 at 4:04 am
[...] ForgeBusiness Affiliate Outsourced Management Blog » So, What is Affiliate Marketing? (Results Driv… [...]
March 12th, 2007 at 4:49 am
Hi Andre,
I like your header(Looking to the future)
I like your photos (Sexy)
I like your content(Excellent-
informative and concise)
March 25th, 2007 at 5:35 pm
[...] Forge Business Affiliate Outsourced Management Blog » So, What is Affiliate Marketing? (Results Dri… [...]