An affiliate network is basically an intermediary between affiliates (also known as webmasters) and a special e-commerce shop program.
It’s convenient.
Like a lot.
The great thing about this very type of network is that it brings together offers from lots of different programs, so one can quickly find the right ones for this or that particular site. For online shops, this means they can reach a wide audience of partners without having to advertise their things directly.
Affiliate networks usually take a small percentage of transactions between webmasters and advertisers.
What do these *affiliate networks* look like in practice, anyway?
Well, they can be pages on forums and social networks, for instance. The service is basically just placing banners, links and texts on the affiliate resource (landing page, that is).
What Can the E-commerce Sector Gain from All This
The thing is, every business need promotion.
Affiliate networks are a great way to attract customers because you only have to pay when someone takes a targeted action. This means there’s minimal risk involved.
…On the second thought, it’s basically zero: the budget won’t be spent on unprofitable actions no matter what.
The way payments work is a little different, though:
- CPS (Cost Per Sale) – in this case the payment is made if the lead actually makes it. This type of program is the most common and is suitable for pretty much anyone.
- CPL (Cost Per Lead) – in this case the payment is made if one is receiving the contact details of potential customers (who’ve filled out a form, for example). It’s a good fit for those who work with databases and data sets of all kinds.
- CPC (Cost Per Click) – in this case the payment is made every time someone clicks on еру link – even if they don’t end up making a purchase.
- CPM (Cost PerMille) – in this case the payment is made for every *thousand* impressions of an advert. This one is widely used in content marketing and on high-traffic websites.
Specifically in the e-commerce sphere, CPS and CPL are actually the relevant. It is possible that CPM is also remains so, yet CPC is hardly.
A Couple of Examples
It’s clear that this is a whole profitable thing, but for the sake of objectivity, let’s look at an example.
Let’s say that an e-commerce company has promo codes that let people buy two TVs for the price of one. The company decides to run this very promotion. So, the affiliate network can attract loads of interested users who’ll get these codes by e-mail. As a result: customers can (and probably will) get two TVs for the price of one, and you can keep your promotion going. Plus, in return for a promo code, users will probably leave you their contact details. For instance, a phone number – you can then send them your latest news and attract them to pay attention to your products or services, but in a somewhat new way.
In close quarters.
But the benefits do not end there. We are also talking about significant audience reach.
Not just any, but the target one.
What’s more, this *reach* thing is not only on the client side, yet also on the webmaster’s side. Maximum diversification: these webmasters are bloggers, owners of other content projects, specialists in contextual and targeted advertising, and many others.
From a purely theoretical point of view, the company even has the opportunity to test different formats and gather analysis on them.
Among other things, the benefit here is that unlike traditional advertising (which is difficult to quantify) affiliate marketing (as a concept!) already in itself offers clear indicators of conversion and income.
Is that all there is to it?
Of course not.
Affiliate network is also cool in the context of niche markets. The thing is, affiliates often specialize in certain areas. This literally means they have a highly engaged and highly relevant audience.
Let’s take an example.
Say, an advertiser sells a $40 anti-age cream. The terms of the contract are 20% commission on each sale. The person working with the advertiser has invested around $600 in a commercial. As a result, he was able to attract 100 people, 50 of whom bought the cream. The net revenue, after deducting the cost of advertising, is $1400.
For the start of a career, this is definitely not a bad result. Especially when one considers that it all happened in one-two-three weeks.
The coolest thing is that it’s a win-win situation for everyone: the advertiser sells goods from their e-shop, and the lead attractor gets paid.
Interestingly, the benefits of affiliate marketing are not just limited to direct sales and lead generation. Another bonus is that by partnering with a network, you get access to a much larger number of advertisers. Sure do, this increases the number of offers available on the platforms and improves the ability to monetize traffic.
