What is Affiliate Marketing?

Affiliate marketing is a web-based marketing practice in which a business (MERCHANT or Advertiser) rewards affiliate partners (or PUBLISHERS) for each visitor or customer directed to the Merchant’s site - which is brought about by the affiliate’s marketing efforts.  Referrals are usually generated by placing Merchant links on the affiliate’s web site, then affiliates aggressively marketing their web site, in turn referring (driving traffic to) the Merchant’s site thus earning a referral fee or commission.  To date, the affiliate marketing model has evolved to not only include web site owners but bloggers and forum activists as well. 

Affiliate marketing is also the name of the industry where a number of different types of companies and individuals are performing this form of internet marketing, including affiliate networks (i.e. Linkshare, Commission Junction, Performics and more), affiliate management companies and in-house affiliate managers, specialized 3rd party vendors, and various types of affiliates/publishers who promote the products and services of their partners. 

Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods including organic SEO, paid SEM, email marketing and banner advertising. Sometimes however, affiliates use “black hat” techniques like publishing bogust product / service reviews to promote Merchant offers. 

Affiliate Marketing is an Entrepreneurial Venture

Affiliate marketing is driven by entrepreneurs at the forefront of internet marketing. Affiliates are usually the first to take advantage of new emerging trends where established advertisers are generally not active. Affiliates primarily learn by “trial and error”, which is also why most affiliates fail before they earn significant income to become “super affiliates” who generate thousands of dollars in commissions per month.  Many compare Affiliate Marketing to offline MLM and Network Marketing.

Brief History of Affiliate Marketing

Since the beginning of Affiliate Marketing, through it’s 10+ year history, there have been many failed attempts at creating an industry organization to  provide regulations, standards and guidelines.  For now, it is a self-regulated industry.  

The only places where varying industry people come together are via online forums and/or industry trade shows. The online forums are free and anonymous where even small affiliates can have a big voice. Trade shows are not anonymous, but most affiliates are not able to attend those events for financial reasons.  

CPA Networks vs. the Affiliate Model 

Most recently, there has been a threat to the traditional Affiliate Marketing model by CPA Networks (CPA= Cost Per Action) such as AzoogleAds or Hydra Network. Traditional affiliate marketing involves significant resource allocation and requires a lot of maintenance including the management, monitoring and support of affiliates. CPA Networks on the other hand eliminate the need for the Merchant / Advertiser to build and maintain relationships with affiliates, because that task is performed by the CPA Network for the Advertiser, who simply puts an offer out, which is in almost every case a CPA based offer.  From there, the CPA Networks take care of the rest by mobilizing their affiliates to promote specified offer. CPS or Revenue Share offers are rarely found at CPA Networks, which is the main compensation model of classic affiliate marketing.          

Lead generation refers to the creation or generation of prospective consumer interest into a business’ specified offering.  In general, lead generation is associated with marketing activities targeted at generating sales opportunities for a company’s salesforce.  (Marketers are the gatherers –the salesforce are the hunters.) 

• A lead is a prospective customer, who has provided their information and shown interest in making a possible purchase.

• Generation activities are the marketing initiatives that produce a perceived interest as well as customer information.

How Lead Generation Works

 Lead generation depends entirely on the decision making process of a buyer. 

§         Complex Sales Cycle: For a complex sales cycle, the key is to identify the most likely prospects and then educate and further qualify them before spending more time, money and resources on them.  The education benefits the buyer; qualification benefits the seller.  This gradual lead cultivation process can go on for months and includes several individuals involved in evaluating a solution.

• Commodity Sales Cycle:  For commodity offerings, the issue is connecting consumers at the right time, place or interest cycle.   Companies have to sift through unqualified candidates to find the few qualified candidates that are looking for a particular product or service.

Although there are several marketing approaches, most involve one of two primary methodologies: Broadcast or Concentration. 

• BROADCAST involves communicating to a broad set of candidates with the expectation of a statistical response back to the marketer. (Advertising is a classic example of broadcast marketing.)

• CONCENTRATION involves identifying and creating a specific set of well-matched candidates into a broadcast-effective sub-set. (Vertical segmentation and trade shows are classic examples of concentration marketing strategies.)

Lead Generation Methods

 Lead generation can utilize various marketing methods including: 

• Broadcast Advertising
• Direct Mail
• Event or Tradeshow marketing
• Seminar or Training
• Publicity and Public Relations
• Whitepapers or Product Literature
• Email marketing
• Web marketing (Search Engine Optimization or other Internet Media buying)
• Telemarketing

Internet Lead Generation

Since 2000, an increasing number of sales organizations have been shifting their direct marketing budgets to Internet marketing initiatives. The Internet allows for the development of extremely targeted lead generation campaign offering geographic, demographic, and contextual targeting opportunities. 

Capture Lead Information

Lead Acquisition is one of the most critical activities within the lead generation process. Identifying or attracting a prospective customer is an expensive and complex task, which becomes even more so if you do not have mechanisms to capture that information for action, some of which include: web forms, email, inbound calls, business cards, inquiry cards, scanners and more. 

In all, lead generation is one of the most impactful marketing initiatives a company can plan and budget for.  With that, all lead generation programs should involve ROI metrics once completed to in fact show results and revenue return.