Affiliate Marketing- The changing phase

Affiliate Marketing conventionally can be described as a method of carrying out promotion or marketing of a particular service/website/product by joining hands with affiliates or associates. These associates or affiliates (as they are popularly called) charge a certain sum of money for promoting the business of their merchants. And thus is established an affiliate – a merchant association that carries out affiliate marketing through the World Wide Web.

While Affiliates here can be termed as the agents, who are hired to assist or aid merchants to promote their stuff online, Merchants are those who want their merchandise/website or service to be promoted.

There are various terms used to address this novel concept of web marketing which very well explain the mechanics of this service. One might find jargons like relationship marketing and associate marketing which convey the concept of this style of Internet marketing in very few words.

History of Affiliate Marketing
Most of us acquainted to this subject of affiliate marketing have certainly heard of the ‘cocktail party’ story from where the concept got a kick-start. For those who aren’t aware, the story goes like:

Jeff Bezos, The CEO and founder of Amazon.com, while talking with his guests at a party came across the idea of linking the website of one lady guest to his site (Amazon). She wanted to invite traffic to her site, for which he would receive a commission. That’s where the idea of associate marketing came into being. That was June 1996; and in almost a decade since then, affiliate marketing has grown to be recognised as a full time Internet marketing service. Though there are several stories that float online about its inception, Bezos’s story remains the most popular.

The Rise of Affiliate Marketing:

However, the interesting fact that draws all the attention is the Statistics that show the total sales generated by affiliate marketing in the year 2006 to be a stifling £2.16 billion in the UK alone; and the figures are expected to rise phenomenally in years to follow.

The reasons anticipated for the flourish and sudden popularity is the rise of ecommerce all over the net, when more and more people begin indulging in trading activities online. Retail, gambling, adult - these have remained the three major income grosser for affiliates, all this while making the affiliate marketing story extraordinary! Now, with the changing times and the evolving face of Internet Marketing, more industries such as travel, finance telecom, mobile telephony have picked up momentum to match the beat of affiliate Internet marketing.

Payment structure: Pay for performance

Made up of a structure or elements, affiliate marketing rewards both the affiliates and the merchants pretty well and that is the reason why it was popularly accepted. With no harm done and an all-gain strategy, it offers a payment on performance structure for advertisers (merchants) & publishers (affiliates). Payment on performance is the payment module which lets the merchant pay its affiliate for the amount of success they bring.

Here the advertiser pays his publisher because of the banner/ads. Published by the publisher, the advertiser receives traffic etc.

Contrary to all other advertising modules, this does not exploit the merchant who otherwise ends up paying a huge amount of money when advertising anywhere else.
The affiliate is able to cash on his inventory (his website) and earn money out of it, without having to invest separately, and that becomes reason enough for affiliates to be contented too.

Pros n Cons

Affiliate marketing programmes can be carried out in two ways. Some merchants run in-house affiliate programmes by the help of standalone software, while others hire affiliate networks or hosted services to run the programme for them and track the various details of sales and leads etc.

Like every other activity this too comes with some handicaps and limitations.

With its share of past and present issues, affiliate marketing is growing and growing steadily; but to have a comprehensive view of a service as effective as this, it is imperative to mention the prevalent affiliate marketing issues and handicaps:

Past and current affiliate issues:

Unlike display ads. Affiliate marketing is not scalable
eMail spams have never been alien to this service.
Search engine spam- spamdexing
Ad ware
Trademark bidding/ppc
Lack of self regulation
Lack of industry standards

The Internet cannot be quoted as the best example of an organised arena. Most of the times, things and practices have evolved here to give rise to new terms and systems and the same is the case with associate marketing.

Training and certification

Affiliate marketing is not a certified field of specialisation. There are no Industry standards, training schools, certificates, courses that can train one to be an affiliate. The existing literature online, first hand knowledge and some few training courses and seminars result in certifications.

Here, as the common saying goes, ‘education happens only in real time.’ There are no set A-Z dos n don’ts that one needs to take care of, and thus most of the prominent affiliates have only gotten skilled while practising it in real life!

Besides all this, there are number of online communities, blogs, forums, video seminars etc that get into group collaboration and brainstorming sessions to come out with new strategies, not forgetting that the solutions are only short-lived for the google algorithm updates every now and then!

Affiliate marketing and Web 2.0

With many a things in the pipeline, the face of the Internet is changing. The emergence of web2.0 sites has not only refurbished the entire look and feel of sites and incorporated interactivity, but it has also bought about positive changes to the world of Affiliate Marketing.

The new media (blogs, interactive groups, forums) facilitates closer interaction between merchant and affiliates, and also helps curb many a crooked affiliate from making money using unethical ways.

All in all, affiliate marketing is growing, evolving and emerging. Walking towards a more structured arena, it has the potential to caste a spell and dilute the eminence of alternative marketing practices in the long run.