Affiliate Marketing for Small Businesses
It seems that affiliate marketing is still the misunderstood stepchild of online marketing and most small businesses don’t use it all. However, if it makes sense, affiliate marketing can be a major part of a marketing campaign for small businesses. So what is it and how can you use it?
Affiliate Marketing at its most basic is putting a independent sales force to work marketing your business who only get paid if the traffic they drive to your site actually converts. It should be a purely cost per action style of marketing, not pay per click, or pay per impression, but only paying when sale is made or a lead is generated. Wikipedia has an article on Affiliate Marketing that we think provides a good explanation and history.
So how do you do it? The easiest and most efficient way to start an Affiliate Program is to join one or more Affiliate Networks, such as Pepperjam, LinkShare, or Commission Junction. This puts your offer out to a huge number of affiliates, many more than you could find yourself. They also give you the tools to distribute approved advertising and set the terms for your campaign. All sales and traffic are tracked through a cookie and pixel system. When a prospective customer is on an affiliate site a cookie is dropped on their browser when they click through to the advertiser site. After they purchase from the advertiser a pixel fires on the confirmation page. This pixel transmits information back to the network, providing the affiliate id, the amount of the sale and other relevant information. The advertiser account is debited the predetermined percentage or amount and that amount is transferred to the affiliate.
Affiliates drive traffic to the advertiser sites through many means, including coupon sites, pay per click campaigns, review sites, email marketing and banner advertising. The best affiliates or Super Affiliates actually run businesses that focus solely on driving traffic to advertiser sites. They are professional and very good at what they do, and they are the people you want marketing your site.
This all sounds good right, so what are the downsides? Well there can be several reasons a small business might avoid affiliate marketing. The first is price. Advertisers need margins high enough to make money while still paying a competitive amount to the affiliates. There are also start up costs to any affiliate program: building the ads, network fees, monthly minimum fees, and the advertiser website might need upgraded. There are also fraud issues, and an affiliate program can take a lot of time to run properly, especially in the beginning.
There are firms, including Raise, that manage programs for advertisers. Would this make sense for your business? Check back as we will go over the what affiliate program managers do and their responsibilities.