Understanding Affiliate Marketing

Understanding Affiliate Marketing

Unless you already have a true understanding of Affiliate Marketing, it is probably an underused, grey area in yourInternet marketing strategy. However, the world of affiliation is growing by the day – to the point where it is impossible to ignore and is rapidly becoming extremely powerful.

Many people may not even realise they are already coming into contact with some form of Affiliate Marketing on a daily basis, which means that for Internet marketers, it opens up a huge area of opportunity.

Here is an example of how one specific scheme works, and how it can be used to a commercial advantage.

Group Buying Sites

Consumers absolutely love these sites, simply because everyone loves a bargain. They represent a win-win
situation for both the consumer and business, if used appropriately.

The popular sites in this sector have an absolutely huge database of clients, and a far-reaching audience.
The way they tend to work is to offer a variety of deals from businesses on either a local, daily or worldwide
scale via e-mail, all of which have two forms of call to action: their availability is limited either by time or number.

All users of group buying websites are required to become members, which usually costs nothing. As members
they are actively encouraged by the site to recruit additional members and to ‘Share’, ‘Like’ or ‘Tweet’ their good
fortune via a variety of popular social networking sites.

From the business side of things, using these sites for marketing will almost always result in sales. However,
businesses are usually required to discount their products or services by at least 50% on the voucher site and
then the value of all sales made has to be shared 50/50 with the voucher site.

This may be a difficult tactic to understand, selling something for only 25% of its value, but in reality it has a
twofold benefit.

The consumers who feel they have purchased a bargain will tell everyone they know, because when any of their recommendations also make a purchase, they additionally receive a cash incentive, and simply because it
represents a bit of ‘good’ news in their lives.

For the business providing the offer, assuming they deal fairly with purchasers, the exposure for their brand
can be massive. They may feel that they have massively undersold, but they should always remember that
this is a marketing exercise and any ‘losses’ could be accounted for within their marketing budget.

Most businesses have to sustain a loss at some point to generate future profits.

Summary

Businesses should always look at the big picture. Maximum exposure for minimum cost can be achieved by
using group buying sites, and the overall loss on actual sales can easily be outweighed by the exposure.
By using the most reputable voucher sites, and dealing as fairly as possible with consumers who make
purchases, everyone can be a winner.

This is only one specific form of Affiliate Marketing, but it is the one that is currently showing the largest growth,
and is one that is certainly worth exploring.