Affiliate
Marketing
Multi Tier Programmes
There are those
advertisers who offer multi-tier programmes in which the commission is
distributed in the form of a top-down referral network involving new
sign-ups.
This format may be described as follows:
Publisher 1 signs
up to an advertisers’ programme and receives a commission based on the
level of
activity created by a visitor to the website who has been referred. If
publisher 1 is able to encourage publishers 2 and 3 to sign up to the
same
programme using a code that identifies him as the source of
introduction, then
all future activities conducted by publishers 2 and 3 will generate
additional
commission, albeit at a lower rate, for publisher 1.
Such a system, as
outlined above, offers a commission for each publisher within the
top-down
structure, regardless of whether each is aware of the existence of
others, in
such a way as to generate an income for those sign-up’s who are
positioned at a
higher level. The aim is to bring on board additional publishers so
that the
instigator of the introduction may move up the ladder in order to
secure
greater rewards.
An example of how
this top-down referral network has been applied successfully is that of
Amway
Global, formally known as Quixtar North America. Quixtar set up a
network
marketing structure and offered its marketing programme to well-known
corporations including Barnes & Noble (which is the largest
book retailer
in the United States), Office Depot (which is a major supplier of
office
products and services), Sony Music (which is the second-largest global
recorded
music company) and countless others.
Very few
affiliate programmes adopt a two-tier structure. In the main, a
one-tier
approach is the preferred option. Referral programmes that incorporate
a
structure involving more than two-tiers are classified as multi-level
marketing, or MLM.
Multi-level
marketing, also known as network marketing,
direct selling and referral marketing, relates to a particular style of
marketing whose purpose is to create a marketing and sales force by
incentivising the promoters of company products not only for the sales
they
generate themselves, but also for the sales of other promoters that
they
introduce to the company. The result of this is the creation of a
downline of
motivated promoters and a top-down structure of multiple levels of
compensation
which takes the form of a pyramid (conceptualised in the term “pyramid
selling”). Both the company and the products it sells are typically
marketed
directly to the consumers (so avoiding
traditional retail sites) and potential business partners
by way of
referrals resulting from the establishment of developing relationships,
together with word-of-mouth marketing.
This
begs the question: The style of marketing enunciated by
Quixtar – how is it categorised? A close examination of Quixtar's
compensation
plan clearly suggests that the marketing concept being employed here is
one of
network marketing. Accordingly, an astute assessment would conclude
that the
Quixtar plan should not be regarded as affiliate marketing. On the
other hand,
the principle partners in the company are considered to be, and for all
intents
and purposes, regard themselves as affiliates. Therefore, it may be
argued that
Quixtar employs the concept of affiliate marketing on behalf of its
partner
corporation.
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
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