Thursday, August 31, 2006

Affiliate Scheme Guide

by S. Jax

What is an affiliate scheme?

An affiliate scheme is a marketing tool used by companies and websites to generate sales. It has a fare system where by the advertiser (or affiliate) is paid by the company for advertising space based on the affiliate's performance.

Some company’s schemes, pay per click. This means that for every visitor who click through from the affiliate website to the company’s website generates a click and so generates revenue. 'Pay per Click' as these schemes are known, usually only offer a minimal amount of money per click. This is because only a small percentage of clicks that you send to them will turn into a sale. Therefore they pay you for non-profitable clicks, and to address the balance they do not offer a reward for sales. However if you can drive a large amount of regular traffic to the pay per click link, the clicks soon add up - The 'look after the pennies' theory.

Other affiliate schemes work on a commission basis, where by you get paid a fixed percentage for each for each sale you generate. The percentage offered by the company will be clearly stated upon joining the affiliate scheme so you know what rate to expect.

These schemes use cookies. Your referred visitor may not 'buy' on the day that they first click through to the company’s website. Especially if it's a large or costly purchase that they wish to make, they may return to the website a week or a month later, Not via your affiliate link. Obviously this would be most frustrating because you would loose your cut of the sale. This is why cookies are used. They store information on the visitors PC, so when they return to a website and make a purchase, the referrer is recognised and the affiliate gets their percentage of the sale.

Cookies have varying lengths, some lasting only a week, where others last 9999 days. This information will be highlighted upon joining the affiliate scheme. However, there are people who object to having information stored on their computer and occasionally remove all of the cookies, but that doesn't mean cookies can not be added again.

With both pay per click and commission based affiliate schemes there is generally a payment threshold. This means that you must generate sales, clicks or leads up to a set monetary value before you payment is sent to you. This is to reduce bank and admin charges for the company or website, it also acts as a carrot for the affiliates to promote and perform and produce those all-important sales. The payment threshold is usually around £20 and £25.

If your threshold is £25 and your cut of say - every dating website membership is 50p you will need to generate 50 individual membership subscribers. This doesn't sound like an unreasonable figure. However, not every visitor who clicks on the link will sign up, they are instead just browsing. Let's say optimistically that 50% of the traffic that you drive to the dating website joins up. That means you have to send 100 visitors to the website before you see the fruits of your labour.

There are Managed Affiliate Schemes where by an affiliate can join a number of affiliate schemes. The sales, leads and clicks form all the affiliate schemes are all combined to contribute to the total making it quicker and easier to reach your threshold because you have a number of interests to promote. This also means you are likely to receive payments more frequently. It also increases the odds of your links being clicked because if you now have 3 companies to advertise, you have potentially triples the chance of showing your visitor something that interests them, you therefore reach your payment threshold sooner.

All affiliate schemes are free to join, you are effectively providing the company or website a service (advertising) for which they pay you. You wouldn't expect to have to have to pay your boss for your job position would you?

Once signed up to an affiliate scheme the affiliate is under no obligation at all. If you no longer wish to advertise a particular company or website any longer you are free to leave the affiliate scheme. However, if the website you are leaving is an independent affiliate scheme, and your generates sales total is below the payment threshold, you will forfeit this revenue. This is not the case with managed affiliate schemes. Your commission will stay 'banked' and can be built up to meet the payment threshold from commission sales from other affiliate schemes you have joined within the managed domain.

"If you own a website and want to make money then join our affiliate scheme, sit back and wait for the cheques to flood in..."

It does sound as easy as that doesn't it? Add some code and fancy banners and Robert is your mother’s brother!

Only it's not that simple. If advertising were a doddle, companies wouldn't need you to advertise for them.

S. Jax writes for

1 comment:

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