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How does
affiliate marketing work?
Affiliate
marketing has rapidly become one of the most popular and
effective ways to advertise on the Internet. The idea of
affiliate marketing is very simple.
A company,
let’s say ThirdSphere Webhosting, goes to
another web site and asks them to
place a banner or link to ThirdSphere on their site. Every time a user
clicks
on that ThirdSphere banner and signs up for a web hosting
account, the owner of the original site that referred the new web
hosting customer
gets a commission. It’s as simple as that.
The history of affiliate marketing goes back
to around 1994. Beginning with the music
website CDNow.com.
They
were, according to popular belief, the first site to pay other web
sites for sending new customers to them. Internet giant Amazon.com soon
caught on and became the site most associated with affiliate marketing.
Today, the practice of affiliate marketing is used by essentially every
major web site in the world.
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Why choose affiliate marketing?
One of the reasons that affiliate marketing has proven to be so popular
is that it is completely based on performance. In most cases, the
company doing the advertising doesn’t pay any money to
the site that is carrying their add unless there have been sales as a
result of the traffic driven to the advertising site. There are,
however, other ways of doing affiliate marketing.
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Some merchant sites have paid websites
hosting their link based not on the number of times an original IP
(visitor) visits through the link, but on the number of times
the banner ad was
“seen” (also known as impressions). This method
presents a host of
problems since things like hit counts can be forged and there is no way
to ensure that just because someone visited a web page that had your
logo on it that they even saw it or if they did, that they even knew
what it was. The most common method of affiliate marketing
includes
paying only when a link is followed AND some kind of transaction takes
place.
In a matter of only a few years, affiliate
marketing has become one of the most cost effective ways to drive
traffic to a site. Since, in most cases, both the advertiser and the
host profit from the set up, there is no reason to believe that
affiliate marketing won’t be a dominant advertising method
well into the future.
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