Affiliate Program Networks: Doing The Work For You
Affiliate programs are the means and instruments by which online merchants generate profit. These programs are hosted by online merchants but marketed by web publishers. Affiliate network is a group of web publishers and online merchants. The merchants pay a part of their profit to the website publisher when an end user does a particular action or executes a transaction that leads to profit for the online merchant.
The idea of affiliate programs was launched in November 1994 by CDNOW when they introduced their BuyWeb program. It was based on the idea that music oriented websites could list albums and also review those that the users might be looking to purchase. These websites would also offer links to CDNOW web site where users could set their orders for the music CDs.
One of the better and more commonly known examples of affiliate program use is the website Amazon. Amazon launched their affiliate program in July 1996. The associates could put a link or banner on their websites and if the purchase was made the associate got paid. Commissions for affiliate programs is made by using CPS or Cost per Sale as a compensation method. Almost 80% of all trades are done using this. About 19 % use Cost per Action or CPA. In these methods the associate or the advertiser must make sure that the customer to the main host site has converted and makes a purchase.
A new concept in the field of affiliate program network is the multi-tier program. It includes distributing commission using hierarchical referral network of sign ups and sub associates. At most two tier systems exist but most of the affiliate programs are still single tier. Some web merchants use in house affiliate programs using well known software while some merchants choose to go through third party services. The third party services are generally preferred as they are unbiased in evaluating traffic and sales. Depending upon the choice of service used payment is done by merchants themselves or by a third party or affiliate networks in support of the merchant.
Now coming to the most intriguing aspect of affiliate programs. How to choose an affiliate program for a target website? There are basically three ways wherein you can find a relevant affiliate program. First and the foremost is the affiliate program directories. These are a kind of handbook to pre-screened affiliate programs and include affiliate discussion boards, blogs and beginner tools. The second way is to use vast affiliate networks that give the platform for thousands of advertisers. This is generally a good way to start to get the hang of things. Third and the most cost effective way is to make use of the target website itself. Generally target websites contain a link titled affiliate program that gives direct affiliate programs, but you need to be experienced enough to know which one would work the best for you.
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