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How Affiliate Marketing Works

Aug 17, 2007
There are several companies in the Internet marketplace that are capturing a piece of the affiliate pie by bringing affiliate marketers together with companies offering commissions for sales. Their role is to manage the affiliate programs for the companies while ensuring the sites offering referral links are paid commissions in a timely manner.

While a few companies manage their own affiliate-marketing program, the use of affiliate marketing corporations is growing with the trend becoming more popular, freeing company resources to concentrate on customer service. It also allows the companies to use the information from referred visitors for lead generation.

The landing page for most companies contains requirements to register to use the site. Minimum, information is requested (as opposed to mandated), enabling companies to gather visitor information. This works well for companies offering items or services, which are not considered renewable. For example, shoppers for music, food items and other disposable items will be shopping for them frequently, while those seeking mortgage information or for re-mortgaging their homes will generally do so only once or twice in their lifetime.

By using affiliate marketing, these companies have thousands of other websites sending visitors their way instead of relying on expensive advertising and marketing, possibly limiting their exposure to potential customers specifically searching for that specific type of information. It can tap into additional markets where they may have been missing the boat.

Affiliate marketing corporations can also help review websites applying to be affiliates, reducing the possibility of a website offering services that is not in the company's best interests from displaying their ads. For instance, a website that sells religious materials may not want to be affiliated with websites for gambling or adult oriented materials. Of course, this goes both ways, as a church may not want to place ads for gambling on their site.

Generally, a company signed with an affiliate marketing corporation will supply a variety of link styles, including text links, graphics links, banners, and even search box links for affiliates to choose from. These links rest on the corporation's website and are gleaned by the affiliate for the best fit for their sites. The corporation will then track the activity for the link including the number of impressions, the number of clicks as well as the amount of purchases and commissions due the affiliate site.

Affiliate marketing corporations however, do not work for free. They often receive a cut of the sale in addition to the affiliates. While this adds to the cost of making a sale, the companies realize that without the additional exposure the sales probably would not happen, and they get the additional benefit of customer information for potential future sales.
About the Author
Jennifer Lavoie is a home-based business coach. Using Robert Kiyosaki's teaching, she helping others to build passive income businesses and retire early and free. http://www.retirefree.ws
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