How to exploit affiliate marketing?

Definition of affiliate marketing.

What does affiliate marketing mean? It is an online commission system in which companies that sell products or services on the Internet pay commissions to the website operator or publisher when the latter refers visitors to the store or the company's website via a link or banner advertisement, who ultimately buys something there or performs a certain action. It also means that you only receive payment from the advertiser when a certain action has been taken by a user, usually a purchase. As you probably already noticed in the article, other English terms are used in this area. They are: merchant or advertiser, the seller or the advertiser who pays the commissions. Publisher, business partner, the affiliate partner who receives commissions for successful affiliate actions. Also, commission models usually have English names.

It is not always necessary to generate a product purchase through an affiliate link or banner. It can also be a simple registration in a newsletter form, for which you can already be paid as a publisher, or even an insurance claim. Both partners enjoy benefits with this form of marketing. The advertiser or advertiser should pay commissions only if the desired action has been successfully completed and you can easily earn money and do not have to worry about selling and shipping products .

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Commission models in affiliate marketing

How exactly can you make money in affiliate marketing or what do the different commission models look like? There are already. The best known are:

pay per click

With this model, you get a commission per click. Pay per Click is very well known, especially through the Google Adsense publishing program. Too often, this remuneration variant is not used because advertisers tend to focus on performance-optimized commissions, i.e. it is better to pay for a truly successful action, purchase, etc only for a single click, which only leads to a purchase in very rare cases.

cost per lead

Cost per lead is also very popular. The term "lead" encompasses many possible actions, such as an entry in a newsletter, an insurance comparison request, a download, etc. In other words, the user must perform a certain action for the commission to be paid to the publisher.

payment per sale

Pay per sale means that a sale must be generated through the affiliate or partnership link. This type of remuneration is the most common, besides payment per lead, and is of course mainly used by online shops. Payment per sale means that a certain percentage of the turnover of the intermediated purchase or a fixed amount plus a percentage share is paid. At Amazon, for example, you will receive a reimbursement for advertising costs on a purchase, even if it amounts to several thousand euros. Other affiliate programs also cap their commissions.

lifetime commissions

Lifetime commissions don't pay many affiliate programs. They are mostly used for subscription offers, where the user has to pay a monthly amount for a certain service. As an affiliate, you then receive a monthly commission for a referred customer as long as the latter uses the subscription.

bonus payments

Many affiliate programs reward their top selling affiliates with higher commissions if they meet or exceed certain sales numbers. These bonuses are offered by almost all online stores and also by insurance programs. There are other commission models that aren't used too often, such as Pay per View, where you receive a fixed amount for a certain number of banner ads, or Pay per Click out, where the user just not to click on a link, but continue to click on the next page and only then a commission is paid.

Other critical success factors: cancellation rate and conversion rate

In a lucrative partnership program, it is not only the amount of commission that is important, but also the cancellation rate. If this number is high, the program loses much of its appeal. Then many users cancel their orders or other actions such as a newsletter subscription and you do not receive commissions or these are canceled retroactively. The conversion rate is also important. The most attractive commission is useless if none of your users buy, click or perform other actions. This is a very important point that is often overlooked. Many see only the high commissions, but forget that you have to generate a purchase or other action first. The advantages and disadvantages of certain commission models are detailed in concrete descriptions during the series on affiliate marketing. As you can see, there are many types of compensation, all of which have their pros and cons. That's why, as a publisher, you should always experiment to find the best commission model for you and your website. But you will know more in the coming weeks.