Affiliate
Marketing
Methods of Compensation
Performance
Marketing
In terms of the
compensation method cost per mille, the only requirement is that the
publisher
ensures that the advertising is displayed on his website and shows it
to his
visitors in order to receive a commission. Therefore, in
the case of
cost per mille or cost per click, the publisher does not concern
himself as to
whether a visitor to his website is one of the target audiences that
the
advertiser is seeking to attract and possibly be able to convert into a
sale
since, at this point, the publisher has already earned his commission.
Especially in the case of cost per mille, this means that the entire
risk is in
the hands of the advertiser. Furthermore, should the visitor not be
converted
into a sale, then the risk to the advertiser is compounded in the fact
that it
is now turned into a loss.
In
the case of the compensation methods cost per action and
cost per sale, it is necessary that the visitors referred by the
affiliate are
more effective than merely visiting the advertiser's website in order
that the
affiliate may receive the commission. In fact, it is necessary, in the
first
case, for the advertiser to convert the visitor into a sale.
Accordingly, it is
most advantageous for the affiliate to focus the most closely targeted
traffic
to the advertiser’s website in order to maximise the opportunity of
converting
the visitor. In both these forms of compensation, the risk involved in
the
visitor not being converted or the loss associated with non conversion
is borne
by both the affiliate and the advertiser.
Affiliate
marketing is also referred to as performance
marketing since it relates to the various methods in which sales
employees are
suitably remunerated. This type of employee is normally compensated in
the form
of a commission for each sale they close and therefore conclude.
Furthermore,
as well as a commission, they may also receive an incentive bonus
linked to
their being able to exceed certain targeted baselines. Although an
affiliate is
actively involved in the promotion of the advertisers’ products or
services,
they are not, in fact, employed by the advertiser. However, the
compensation
models utilised in affiliate marketing have much in common with those
in
operation for individuals in the advertisers’ own sales department.
Consider
the following statement: “Affiliates may be
regarded as an addition to the sales force of a business”. Such a
description
if often applied when describing the role and application of affiliate
marketing. However, although it characterises some aspects of the
operation, it
is, in fact, not strictly accurate. In the case of affiliate marketers,
it is
clear that they have little if any influence on any particular sales
prospect that
is now in the focus of the conversion process, once that targeted
visitor has
been directed towards the advertisers’ website. On the other hand, of
course,
the sales team employed by the advertiser does, indeed, exhibit a large
degree
of control and influence from the inception up to the point at which
the
prospect has been converted into a sale and, as such, either signs the
sales
contract or completes the purchase.
Affiliate
– How To Succeed
Peter Radford writes
Articles
with Websites on a wide range of subjects. Affiliate
Articles cover Background, History, Methods of Compensation, Websites,
Various
Issues.
His Websitecontains over 140 Affiliate
Articles.
View hisWebsite
at: affiliate-how-to-succeed.com
This Article may be republished
so long as the
Resource Box and entire contents remain in tact. |
