The Imperfect World of Quantifying Website Traffic
Online Advertising Lingo
Necessities for Every Company with a Website
Leveraging the True Power of the Internet
Bootstrap Marketing Online
A Dated Introduction to Online Marketing*
*Note: This is the original version of a whitepaper that was authored in 2001 by iCondotta's founder and principal consultant, Stephan Aarstol. It's a useful primer, but dated - pre-Wikipedia (2001), pre-Google AdWords PPC (2002), way pre-YouTube (2005), you get the picture...
Affiliate marketing is the online version of a strictly commission sales force. It’s a pure revenue sharing relationship whereby websites promote goods or services from another site on the come (no money upfront). If they refer a customer who turns into a sale, they get a commission of the revenues generated. If they don’t generate any sales, the company selling the goods or services doesn’t incur one cent of expense. Sounds like a pretty good deal for the company selling the goods and services, huh? It is, as long as you can attract a lot of quality affiliate sites.
Most old-school marketing types start salivating when they first look at affiliate marketing. It seems to be the holy grail of marketing – risk-free marketing. Who needs a marketing budget when you only have to pay commissions out of collected revenues? While this cost per action advertising model can be a very powerful component of a comprehensive online marketing strategy, it is not the singular answer to online marketing as many companies believe it to be for a couple of reasons:
A successful affiliate program that is built to last can only be achieved if affiliates are well taken care of, or if there is a whole bunch of them and they are too desperate to care. The “too desperate to care” part isn’t a joke. In fact, this is precisely why affiliate programs work so well on the Internet. Sales from affiliate marketing are estimated to represent well over 10% of Internet sales today, and many studies predict this number to grow. The obvious question that you may be asking is, “Why is this so popular if affiliates aren’t making any money?” Quite simply, it is because there is a rapidly growing base of millions and millions of small website owners who feel they haven’t got anything to lose by joining an affiliate program. Worst-case scenario is they don’t make anything, which is exactly where they sit without joining. Best-case scenario, they make a buck or two, and a few sites do relatively well.
The bottom line is that, done right, affiliate marketing is a powerful means to organize small individual contributions by a large number relatively inconsequential websites to achieve an economical and effective sum marketing result. Five affiliates won’t make a dent, five hundred and you’ll see a significant impact, and five thousand means you’ve got a formidable and powerful marketing army.
While you can conceivably develop an affiliate program in-house or integrate an off the shelf solution into your site, for most sellers this is probably more work than it’s worth considering there are many well refined ASP models that will do the leg work and maintenance for a set-up fee, a cut of the revenues, and usually a yearly renewal fee. Two popular affiliate program application service providers are Commission Junction and LinkShare.
Authored in 2001
by Stephan Aarstol