How Do Affiliates Get Paid?

Do you want to enjoy the life with Blogging, then you must understand the method used by the affiliate to get paid from their blogging website. In this Blog you are going to learn about the affiliate marketing structures, basic advertisement models, way of payments and how affiliate commission is tracked i.e. How do Affiliates get paid? or How to earn money online with affiliate marketing?

Due to the fast internet services and increased use of various devices like mobile, Tablets, Laptops etc. with rapidly increasing number of users, almost all business companies have big marketing opportunity.

The strength of the World Wide Web has the power to provide easy access to information using a network of web sites.

Affiliate marketing is a very powerful and profitable online marketing tool. Affiliate programs are a type of marketing where the partners or affiliates advertise products of the merchant.

In fact, any website can become an affiliate. Affiliate marketing offers websites an opportunity to increase revenue and take advantage of unsold advertising space on the site. Registering a website as an affiliate with an affiliate network enables affiliates to promote a large selection of different firms and to choose the type of companies that best suit the particular site.

For affiliates like you and me, negotiating advertising deals directly with individual companies would be very time consuming and often requires resources and may not affordable.

For some websites, affiliate marketing is a way of monetizing advertising space that has not been sold to any advertiser directly.

There are many websites to which affiliate marketing is the primary source of revenue. These sites are dedicated to affiliate marketing and the whole business model is revolves around it.

There are many different kinds of affiliates. They include news, price-comparison and review sites, blogging, social media sites, loyalty such as cash back or reward sites, voucher code and discount sites as well as affiliates specialized in search-engine and email marketing.

Affiliate marketing is a performance based channel meaning that the publisher is rewarded for a successful performance, which is most often a sale. Without sales there is basically no cost which is why there is also minimum risk involved, while doing Affiliate marketing.

This framework gives rewards to partners (what the industry refers to as affiliates, publishers and influencers) who drive quality sales to the brands they work with.

What are different affiliate structures?  

There are basic two types of affiliate structures.

Single-tier affiliate structure:

Most commonly used affiliate structure is Single tire Affiliate structure. In this model merchant pays a commission for every single sale that is brought by or through the affiliates.

Two-tier affiliate structure:

In the Two tire affiliate structure two and more affiliates are involved in the same process. Normally in the first tiers affiliates that stand in direct contact with the merchant. However, in the two tires affiliate structure, affiliates can choose to subcontract to another more affiliates.

If a product is sold, everybody who contributed to the sale will get a part of the commission. A two-tier program can help to quickly grow out an affiliate network. Besides that there may be some problems associated with the communication with all or second affiliates.

Whenever there is a sale through the Affiliate, He or She (Affiliate) will receive the commission from sold product’s merchant or manufacturer or supplier to whom you are affiliate.  

Besides the above source of income to the Affiliate marketer, you can also monetize your website with Adsense or similar kind of monetizing platforms.

To generate income from your website you need to understand the basic advertisement models most of the advertising agency follows for website.

What are basic advertisement methods?

There are several advertisement models available for Affiliate marketer of website owner.

You may have heard below given terminologies but actual meaning of these terminologies and how does it work is more important to get benefit from them.

i) Banners or Text links:

The most commonly used affiliate model is the banner and text links.  In the form of banner and text links advertisements are placed on the affiliate’s web site, and when clicked by the user, redirect the user to the merchant’s website.

Banners or text links usually attribute the name of the product or name of the company to create brand awareness. The banner and a text description, produces a much better click-through-rate. It is because the user has an image and some text on the banner convincing him to click.

You can see below banner where I have given the referral link. If you want to monetize your blogging website you can click on below banner and sign up.

ii) Storefronts:

The problem with banners or text links is that when a website’s visitor clicks on the Banner or Text link, it will leave the affiliate web site and open separately to merchant’s site. This leads to lose the traffic on Affiliates website. However, Affiliates may get a commission. As a result of this, the storefront affiliate marketing model is popular.

In this storefront model visitors on your website will not leave your website. In this storefront model merchant offers a complete online store that can be customized on your website and looks like the affiliate website.

Affiliate who have some technical knowhow and resources can benefit from this model. In short Products from merchant’s site will be available on your website for display and sale.

Once the user buy the product from your website, you will get the commission depends on product.

iii) Pop-ups: 

As name suggests, when a banner or link is clicked by user, a small pop-up window appears on your website with offer inside. When the user has finished reading the offer, or even completed a transaction, he simply closes the window and will still be on the original page of your website.

iv) Widgets:

Widget is the integral part of your website that interacts with visitors on a website. Widgets can be any interactive model of advertisement including games, quizzes, content sliders, etc.

The benefit of using the widget is that you can create unique, interactive model of advertisement. Since your website visitor is interacting with this type of widgets on your website there are more chances to get converted them in to the sale. That leads to more benefit.

v) Data feeds:

It is very beneficial for the Affiliates because, using this model thousands of products can be added instantly on your website instead of manually doing this. The more advance version of this model is dynamically generated data feeds.

Using dynamically generated data feeds you can constantly update the content on the affiliate’s website to ensure that data is always up to date and current.

Data feed provides affiliates with all information about various products in a database, including description, pricing, reviews, and more. This type of model is more beneficial to all participants like Affiliates, Merchants and users.

vi) E-mail:

Instead of implementing banners and text links on your webpage, the banners and links can be sent directly to the user in their e-mail box.

A big benefit of this could be that if the email is very creative, it could turn viral and may reach many more potential customers. But while doing the E-mail marketing don’t do spamming.

The one major thing you must understand is that spam does not usually make sales, and it’s technically illegal.  

Which payment model is used in affiliate marketing?

The most commonly practice payment models of affiliate marketing are given below:

1) CPM (Cost Per a thousand ad impressions)

2) CPC (Cost Per Click)

3) CPA (cost per action or cost per sale)

In short-term advertising campaigns cost per a thousand ad impressions (CPM) and cost per click (CPC) payment models are most frequently used.

To increase the awareness during the product launches and to maximize the number of people exposed to the product advertisement, the CPM model is suitable as the advertiser pays based on how many times the product advertisement is viewed.

However, if you want to increase the number of website visitors such as during sales campaigns, the CPC model is more appropriate.

As the name suggests Cost Per Click the advertiser will only pays for the amount of clicks generated and the number of people that have been directed to their website. The CPA payment model is the most commonly practiced in affiliate marketing.

In the cost per action or cost per sale (CPA) advertiser will only pays you commission for the generated sales. Even if the user click on you product and surf through your website, you will not going to get payment for this until unless the user but something.

The objective is to generate incremental sales via the affiliate sites and it is based on a more long-term approach in comparison to the CPM and CPC campaigns.

How Affiliate commission is tracked?

Cookie-tracking technology is used for Affiliate marketing. Typically it is managed by the affiliate network that connects the advertisers or merchants as well as affiliates with each other.

When a user on your website sees an ad or clicks on a link (usually a banner or a text link) on an affiliate site, a cookie is saved on the user’s system (computer or mobile or tablet etc.) and the user is redirected to the advertiser’s / merchants website.

If the user then completes a purchase on the merchant’s site, the saved cookie is identified and confirmation of the sale is sent to the affiliate network’s reporting system.

The information about the affiliate who directed the user to the advertiser / merchants is saved and this is how the Affiliate’s commission awarded to the right affiliate.

The commission is typically a fixed amount of money per sale or a percentage of the product or service sale value. The affiliate marketing process is illustrated in below figure.

Practically this concept of affiliate marketing was established by Amazon.com. It refers to partnerships between advertisers / merchant and websites (i.e. affiliates).  

Amazon is not manufacturing the products, but they buying products at reasonable prices from different manufacturing companies, and then sell these products to customers in all over the world.

Amazon sells products like books, e-books, electronic items, home appliances, mobile, computer and tools related to computer, jewellery, motor vehicle parts, groceries and all other stuff according to customers need. Amazon gives several offers every day to customers.

FAQ

Read More: How to start Affiliate Marketing with No Money?