Affiliate business has gained a lot of popularity especially in recent times. Affiliate business is related to the internet and comprises of a marketing technique through which the affiliate is awarded for each customer or visitor created by his marketing efforts. Affiliate businesses can be termed as an industry where exist a number of individuals and companies involved in a form of internet marketing.
Internet marketing is mainly done through the network of affiliates, affiliate management companies, affiliate managers, third party vendors and people involved in promotion of the product. According to marketing experts, affiliate marketing often overlaps with other forms of internet marketing techniques. This is mainly because the affiliates bring into usage several advertising methods conventional to both forms. These marketing methods mainly comprise of email marketing, search engine optimization, display advertising and paid search engine marketing.
The affiliates also bring into usage several unconventional forms such as reviews of the products and services offered by the manufacturer.Affiliate business uses a website for driving the desired amount of traffic to the website of the client. This is the reason why affiliate marketing is often also an overlooked technique by the advertisers as they mostly depend upon conventional techniques state above. Irrespective of the less popularity of affiliate marketing it plays a significant role in the marketing strategies of e retailers.
Compensation plans under affiliate businesses: Several types of compensation plans are found under affiliate business. The compensation plans can be divided into various headings.
Predominant methods: This category of compensation plan is the most popular and widely used one. It is estimated that about eighty percent of affiliate businesses out there bring into usage methods belonging to this category. Some of the most commonly used methods under this heading include CPS or Cost per Sale covering more than eighty percent and CPA or Cost per Action covering nineteen percent. The remaining one percent brings into usage other methods like CPM (Cost per Mile) or CPC (Cost per Click).
Fewer or diminishing methods: It should be noted that less than one percent of affiliate marketing programs bring into uses the CPC or CPM methods. The above stated methods heavily depend upon paid search and display advertising. The CPC methods was very popular in earlier days, but has lost its shine mainly because of the increasing number of frauds related to the method. This is very similar problem to the click fraud faced by most of the modern search engine in recent times.
On the other hand CPM method requires the publication of advertisement on the website of the publisher which can be used by the visitors. Thus, the amount of commission received by the publisher mainly depends upon the number of visitors directed though the advertisement. This process is different from the Pay per Click methods as it involves additional methods of generating revenue for the publisher. Thus, the visitor should not only be aware of the advertisement but should also click on the advertisement for generating revenue of the publisher.