Ever wonder how online retailers like ebates.com are able to offer consumers cash back on online purchases through their site? The answer is affiliate marketing, a direct marketing tactic that offers purchasing incentives to consumers.

So, what is affiliate marketing? It is a service that uses one highly trafficked website to drive traffic to another. Affiliate networks earn commissions by driving traffic to a business’ website. A good example is Amazon.com, which uses affiliate partners to display Amazon.com advertisements, therefore driving increased traffic to Amazon.com.

The affiliate networks are valuable as they broker, manage, monitor and report on the advertiser and publisher relationship.  A publisher is defined as someone who has a website and wants to sell advertising space on it.  An advertiser is in the market to buy the aforementioned advertising space.

In a broader sense, affiliate marketing creates a virtual sales force for advertisers, generating more conversions, and allows the affiliates to profit off of their network of website’s.

There are various types of affiliate marketing and each enables the affiliates, advertisers and consumers alike to all reap the benefits of this tactic.

Search affiliates earn profits in the arbitrage between media spend on the search engines and the commissions paid by advertisers.  In other words, they earn commissions for every sale/lead they generate for an advertiser and then reinvest some of that profit into costs for maintaining a paid search campaign and/or SEO activities. Search affiliates make it possible for the advertiser to occupy more than one position in search results via paid and/or natural search.

Coupon affiliates provide their members with instant rebates and savings via coupon, promotion codes or exclusive offers.  Advertisers use the affiliate network as a means to distribute discounts that incentivize users to visit their sites. When an affiliate posts coupon codes they receive a commission every time someone uses that code.

Cause-related affiliates pledge some portion of the commissions they earn from advertisers to a particular cause instead of collecting commissions for themselves. For instance, SchoolPop.com donates a portion of the commissions they acquire through purchases and leads to schools of their consumers’ choosing.

Loyalty affiliates offer cash or a cash alternative that is earned when members complete a desired action for the advertiser (purchase or lead). Often when receiving a cash alternative, consumers accumulate points which can be accrued over time and redeemed for gift cards or other items of value. A good example of this is frequent flyer miles. From here, loyalty affiliates receive a commission from the retailer once the conversion takes place.

Regardless of the type, affiliate marketing has many benefits. For starters, affiliate marketing is a win-win for both advertisers and the affiliates themselves. As we have previously mentioned, if an affiliate marketing campaign is managed properly – advertisers will receive incremental leads/sales, affiliates/publishers will get paid for generating the leads and the affiliate network will receive a commission off of each transaction they broker.  Additionally, affiliates often offer many advantages to the consumer, creating incentive and money savings. When implemented correctly, affiliates benefit all parties involved.

If you are interested in learning more about what affiliate marketing can do for you, contact Rise Interactive. Rise takes advantage of long-lasting relationships with the affiliate networks to gain premium exposure and optimal media rates, managing the process from start to finish.

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This entry was posted on Wednesday, August 26th, 2009 at 7:16 pm and is filed under Affiliate Marketing, Rise Interactive. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.