Affiliate Networking Basics for the newbies

I should have written this before I got to write my first two affiliate networking articles, so let’s talk about the basics of affiliate networking and hopefully somebody will learn a thing or two from this post.

What is Affiliate Marketing? (according to Commission Junction)

Affiliate marketing is an online advertising channel in which advertisers (online merchants that sell products or services) pay publishers (independent parties that promote the products or services of an advertiser on their Web site) only for results, such as a visitor making a purchase or filling out a form, rather than paying simply to reach a particular audience. This “pay-for-performance” model is in essence the modern version of the “finders’-fee” model, where individuals who introduce new clients to a business are compensated. The difference in the case of affiliate marketing is that advertisers only pay their publishers when the new client introduction results in a sale or a lead, making it a low-risk, high-reward environment for both parties.

The Major Players

Advertiser/Merchant – vendors who submit their campaigns or offers to the affiliate network for placement by the publishers

Affiliate Network – middle man. This is the network which houses all the campaigns with advertisers and publishers alike. They will provide the loads of campaigns to the publishers and the tracking and reporting tools for the advertisers. They usually get a cut in the process, of course. One of the most successful would be Commission Junction!

Publishers/Affiliate – could be any type of website or the owner of the website who places the ads from an advertiser (available thru the affiliate network) and receives a commission for every click or lead generated

How it Works, Tracking and All

Some of you might be wondering how the affiliate networks track leads or sales? This is usually done throught cookie tracking. Through this method, when a visitor to a publisher’s website clicks on an offer/ad, there is a tracking mechanism (a tracking code in the ad link) which places a cookie in the visitor’s computer. Clicking a pay-per-lead ad will usually bring the user to a registration form. If the user decides to sign up and completes the registration process of the offer, he/she will reach the confirmation or thank you page. The thank you page contains the tracking pixel (invisible code) which will match the information saved in the cookie (publisher id, offer id, etc). When a match is made, the click is converted to a lead.

Campaign/Offer/Ad/Publisher/Affiliate link – This usually comes as codes (html or javascript) that publishers/affiliates place on their websites in the hope that some visitors will click on the ad and convert to a lead.

Tracking Pixel – this is usually an invisible 1×1 img pixel placed on the confirmation page of the of the offer registration

A Few Abbreviations

PPC – pay per click

PPL – pay per lead

CPA – cost per acquisition (example is www.cpadna.com)

Alstrasoft Affiliate Network Pro Software

Alstrasoft Affiliate Network Pro is a good pick to start out your affiliate networking site!

Affiliate Networking Site in the Philippines

I came over this blog about an affiliate networking site in the Philippines – www.AsiaCenturyph.com. I am a web development professional and luckily, one of my biggest projects way back is an affiliate networking site. Yeah, I built one and that was how I got introduced to the world of affiliate networking. Unlike many players though, I learned the ins and outs of it from the technical point of view first and inevitably, I got to learn the business side of it. To tell you the truth, I am amazed by the dynamics of it – affiliate networking, the whole affair.

Way back, I doubted that an affiliate networking site would be successful to run here in the Philippines. I thought there weren’t as many online ad agencies, merchants/advertisers, publishers here as there is in the US or UK. The most profitable and which give big payouts are CPL’s or cost per lead/sale transactions and in fact, there aren’t that many online buyers in the Philippines. I think it has got to do with the hesitant Filipino to buy something online. Still publishers can still earn from Cost per click campaigns but not so much from CPL campaigns. I am intrigued by how this new local affiliate network will perform. I’ll keep an eye out.