What is Affiliate Marketing? – Definition, Types, And More
Definition Affiliate Marketing
Affiliate Marketing works in the following way: the Affiliate promotes the product of an entrepreneur/company in exchange for a commission for each sale or action carried out.
Despite appearing a novelty, this business model emerged in the 1990s, when Amazon, the US giant in the retail segment, began making the service available to anyone who wanted to publicize the products available in the store.
All he needed was to create a record base and wait for Affiliates to do all the outreach work if the strategy resulted in sales, great! If not, they didn’t spend a penny.
For people with persuasive skills, this was an opportunity to earn money working at home. It is a commercial relationship in which everyone wins:
- Affiliates manage to monetize their websites, blogs, and social networks, through the sale of third-party products, without having to have a great idea or the job of creating a product.
- Producers gain various distribution channels and thus manage to impact more customers and, consequently, make more sales.
- And even customers who have more channels to search for products and make a more confident purchase decision.
Also read: What is Freelance? – Definition, Functions and More
Types of Promotion for Affiliate Marketing
There are various formats for Affiliate programs. It is the responsibility of the producer to decide which is the most suitable for his product and his business objectives.
Despite having similarities with each other, Affiliate marketing oriented towards lead generation is different from that focused on conversion. Although both point to Financial Return. Below, we explain each of the various Affiliate Programs.
Cost per Click (CPC)
In this type of program, the Affiliate gets paid per click. That is, they earn every time someone clicks on the banner, pop-up, or any advertisement that is on display on their blog, site, or social networks. In that case, the Affiliate’s remuneration will depend directly on the performance of the advertiser’s campaign.
Cost per Action (CPA)
In the case of cost per action, the only Affiliate gets rewarded if the users click on the advertisement and carry out some work on the landing page of the ad. Which can be to register, request a quote, or make a purchase.
In these cases, it is not enough to publish the advertisement; the Affiliate will have to use his influence to show the benefits of the product and convince people that this offer is reliable.
Cost per Thousand Impressions (CPM)
In the Cost per thousand impressions (CPM) format, the advertiser pays a fixed value to the Affiliate when the advertising banner reaches a thousand views. The number of impressions is equivalent to the number of pageviews on the blog.
Therefore, the CPM is helpful for the Affiliate who has many accesses. Since it will get paid regularly, regardless of the number of visitors.
Cost per Sale (CPV)
In this model, the Affiliate only receives the commission when the link shared by him generates sales and is an excellent option for the small manufacturer.
At Hotmart, sales made by Affiliates get identified through HotLinks. Which are particular links generated by the platform, every time someone requests affiliation with a product? This link allows commissions to be processed automatically at the time of purchase.
How is Affiliate Marketing helpful to business?
With the evolution of the Internet, new marketing formats appear every day. Always expand the forms and channels that manage to attract the attention of the consumer. It is that people are increasingly exposed and demanding. In addition to knowing very well the type of advertising that interests them when buying online.
Affiliate Marketing emerges as an exciting alternative for people who want to work with Internet sales. As well as being an excellent tool for Producers who wish to increase the dissemination of their products online.
Also read: What is Virtual? – Definition, Origin, Discoveries, And More
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