Affiliate - How To Succeed 5

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