Affiliate marketing is a completely new marketing concept that has been born of internet marketing. Affiliate marketing means marketing by the help of advertisements placed on websites and webpages owned by people other than the advertiser. These other people are the publisher of the advertisements and they are also referred to as the affiliates. Publishers/affiliates make money by allowing the advertisements from the advertisers on their web spaces. A pay per click model or PPC model generally determines the payment of the publisher. All these concepts have been discussed in brief details here.
The development of affiliate marketing as a marketing tool has happened due to the unique interactive nature of internet marketing strategies. Unlike other conventional marketing strategies like newspaper advertisements and television advertisements, in internet marketing the target audience of the advertisement can directly connect to the advertiser due to the interactive nature of the internet. The audience can even like/unlike ads (as in Facebook) or post comments and give rankings to the advertisement (as in YouTube video affiliate marketing). This interactivity let people realize that the relation between the advertiser and the audience can even go on in a level, where someone from the audience can help broaden the scope of the advertisements by the advertiser. This someone from the audience now lends his webpage to the advertiser and becomes to be known as the affiliate/publisher. The affiliate earns money depending on the volume of the relevant web traffic that the affiliate brings to the advertiser.
The number of clicks the advertisements receive while on the publisher's website determines the volume of the web traffic that the affiliate/publisher brings in to the advertiser. Each click has a fixed rate of payment and so this system of earning through audience clicks is known as the pay per click model or the PPC model. The rate per click is determined by an agreement between the advertiser and the publisher.
The affiliate marketing advertisements can be in various forms and each type has a separate price tag associated with it. The placement of the advertisement on the publisher website is also an important factor and that also determines the payment conditions on the publisher-advertiser agreement. Like placement, the duration for which the advertisements are to be displayed on the publisher web space is also a contributing clause of the publisher-advertiser deal. The various types of affiliate marketing are banner advertisements, video advertisements, plain text product listings, flash animated advertisements, blog space advertisements etc. Each type of advertisements comes with their own characteristic appeal and it depends on the advertiser discretion which type of advertisements he wants to pursue.
However, there is a certain disadvantage in affiliate marketing too. This happens when the publisher does not know which types of ads are going to be published on his or her webpage. There is the risk of vulgar or abusive ads being displayed on the publisher website, thereby affecting the reputation of the publisher (although the publisher is not the person who has generated the ad). For this reason, it is essential for the publisher to specify the type of advertisements that are to be displayed via the advertiser-publisher agreement.
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