Posts Tagged ‘products’

Affiliate Marketing Programs – Pros & Cons

November 15, 2008

November 14, 2008

“Affiliate Marketing Programs – Pro’s & Con’s”

Affiliate marketing programs are revenue sharing ventures between a website owner and an online merchant. Basically, a website owner places advertisements on his site to help the merchant sell his product or service. Usually, the website owner does not receive any commission unless a sale or lead has been generated. There are several ways that a web site owner can receive revenue through affiliate marketing. There are also several pros and con’s to affiliate marketing for both the merchant and the website owner. Here we will briefly examine the different forms of affiliate marketing and the pros and cons of such programs.

Website owners can get paid one of three ways – pay per click, pay per sale, and pay per lead. With pay per click, every time a potential customer leaves the affiliate website by clicking on the merchant’s advertisement, a certain amount of money is deposited into the affiliates account. With pay per sale, every time a sale is made as a result of the advertising on the affiliate’s page, the affiliate receives a portion of this revenue. Finally, with pay per lead, every time a potential customer registers on the merchant’s website as a result of the advertisement, a predetermined amount is deposited into the affiliate’s website. The article at www.wisegeek.com provides a brief but to the point description of what affiliate marketing is, the different ways an affiliate earns revenues, and suggestions on what to look for in an affiliate relationship.

 There are various pros and con’s to affiliate marketing programs for both the merchant and the publisher. This particular article by Jason Gazaway at www.jobbankusa.com examines the pros and cons of affiliate marketing programs. Gazaway states that affiliate marketing gives the merchant a lot of exposure. He also stresses that the one thing the merchant needs to keep in mind though, is finding a website that will be a good “fit” with their product and where their target customers will visit. Through affiliate marketing the merchant gains more and more customers without spending the time to look for them.  Finally, the article suggests that different customers coming from various websites can provide the merchant with some insight into consumer trends and demands. As for the affiliate, well they get to make a little extra revenue from simply reselling and promoting the merchants website.

However, there are some downsides to affiliate programs. Gazaway’s article suggests that the merchant may suffer from high commission costs, as well as costly set up and maintenance fees that are charged by most affiliates.  There have been cases where merchants will close down programs without informing the affiliate and may leave without paying commission. Basically, if there is a downside that sums up all the pitfalls of this program it would be around trust, efficacy, and legality. Kathy Hendershot-Hurd’s article at goaticles.com examines the key to success with affiliate programs, and explains the process behind the one to multi tier programs. She also distinguishes between the pros and cons of affiliate marketing for the merchant and the affiliate using business based examples.

Despite its disadvantages, affiliate marketing programs are still considered one of the best ways to make money online. Surely, this notion of affiliate marketing programs is steadily increasing. It is a good way for website owners to make money at no extra cost to them, and it is a good way for merchants to market their products for considerably cheaper then other marketing avenues. However, it is also important to note the benefits and disadvantages of these types of programs and that affiliate marketing programs may not be in the best interest of all e-commerce participants. Having a good fit between the affiliate and merchant will probably make the difference in the effectiveness of the marketing efforts