What is Affiliate Marketing?

So Recently I was asked to put up a hub about the basics of affiliate marketing...even more basic then the previous one I put up, so here goes:

Affiliate Marketing For Dummies...and Other Intelligent people who just don't know how to do it:

Affiliate Marketing simply is a marketing strategy used by businesses to drive additional traffic to their product or service by compensation third party sources for conversions. These conversions could be in the form of Clicks, Leads, or Sales.

These are the three major types of affiliate marketing, more well know as:

• Pay Per Click
• Pay Per Lead
• Pay Per Sale

Pay Per Click - Pay Per Click is exactly what the name implies; every click on ads placed on your site means you get paid. One of the most well know PPC (Pay Per Click) affiliates is: Google Adsense.

Pay Per Lead - Pay Per Lead is usually done two different ways. First, by collecting names and emails, and second, by generating leads towards a service given.

(ex. Landscape Architecture company receives a lead for on a free consultation for a near by home.)

Pay Per Sale - Pay Per Sale is also very basic. You develop an affiliate site with a link called a hop link. This link is attached to a cookie, which tracks the search of a user for a certain amount of days. If during the time period the potential customer buys from the affiliate site then you get a percentage of the complete sale.

Affiliate marketing overlaps with other Internet marketing strategies, due to its regular advertising methods. SEO (Search Engine Optimization), and regular marketing practices are also heavily used for affiliate sites.

I have briefly outlined the major types of affiliate marketing strategies and sites below:

Pay Per Click - Create ad sense accounts with the ads leading to the affiliate page through your hop link.

Coupon and Rebate Sites - These sites receive information on promotions, coupons, discounts, and rebates from companies wanting to get rid of product, at the same time receiving a kick back from connections made on their site. (ex. CheapStingyBargains.com)

Comparison Shopping - These sites list all the products from several sites allowing the consumer to do research on the cheapest or best quality products on the internet. They provide the consumer with ease of shopping and receive percents on all the sales made. (ex. pricegrabber.com)

Reward systems - The company offers large discounts and promotions for becoming a member or subscribing to their business. (ex. Sam's Club, or DisneyMovieClub.com - If you do sign up for the Disney Movie Club sign up saying you were referred by: 4563144)

Product Review Sites - These are sites that list consumer reviews on products, and link to the sites. (ex. buzzillions.com)

Personal Websites - These are sites w/ personal reviews from a single person on all the products they have tried.

Blogs - Blogs are very similar to personal websites, and both are usually optimized for one niche group of products (A niche group of products could be Golf Clubs, or Hunting gear. Golf and hunting being the main categories and the niche being a more specified avenue with in the category.)

E-mail - These are massive opt-in email lists where products are also reviewed and offered. (opt-in basically means the people chose to be in the email list, these include newsletters.)

Shopping Directories - Shopping directories are very similar to comparison shopping sites, in the fact that they list several products from several different sites. The main difference is there is little to no comparison made on these sites. (ex. Shopster.com)

Other types:

• Adbars
• Cost Per Action
• CRM
• File Sharing
• Registration Offers
• Virtual Money or Currency