What is Affiliate Marketing actually and how does it work?
Affiliate Marketing is one of the easiest ways of making money online, that’s why it is more and more popular every day. I know it can be hard to understand for people who are new to the internet business in general, so let me use an example from real life, that we all are familiar with.
Ever met someone who wanted to sell you some insurance or a savings plan? Of course you have, and even thou these people can get annoying, they will serve as an excellent example here 🙂 Anytime an insurance agent get’s you to sign-up for a plan, they get a commission from the insurance company. This is what an affiliation relationship looks like – affiliate delivers customers and the company pays a commission to the affiliate.
Internet Affiliate Marketing (AM) is no different, affiliates deliver customers to whoever is willing to pay for them. However, while in “real life” you are limited to your local area or your state in the best case, Internet knows NO BORDERS. Right now I have affiliate campaigns running in Asia, Africa, America (North and South) and also in Europe. Can you feel the immense potential that this has?
So what can you actually sell as an affiliate? Here is another awesome thing, you don’t actually have to really sell anything, there are easier ways of making $ than this. You can make people register for lotteries, free stuff giveaways, let them download free apps for their smartphones … send people to dating sites and get paid for free registrations… Yes, there is a ton of companies that will pay you for every POSSIBLE customer who shows some interest and registers with their email address for example. These possible future customers are referred to as LEADS.
Leads are huge right now! Every company with an online presence wants them. And that’s a huge opportunity for us, the affiliate marketers. You can promote a wide range of products using the “pay per lead” model – all the iPhone 7 giveaways, horoscopes, ton’s of online games, dating sites, financial products, business opportunities … the options are really wide.
Affiliate marketing is not just about leads thou, you can choose products that require a direct sale and get a commission from it. These can be both physical or digital products. Think about stuff like nutrition supplements for physicals and various e-books for digitals.
The recent rise of smart-phones created a new interesting income stream for affiliates – app installs. App developers want the installs and they are willing to pay for them, even tho they are free for the users. The logic behind this is simple, free installs are nothing but LEADS again, the users can turn into paying customers later on.
To sum up what I wrote so far – I just described the 2 basic models used in the affiliate marketing world. It’s Pay Per LEAD (PPL) and Pay Per SALE (PPS). There are more models, but these 2 are the major ones so make sure you remember them.
OK, now you know what affiliate marketing is about, you have a broad idea about what you can sell or promote, but where do you get the eyeballs?
There are 2 ways of getting the TRAFFIC – traffic is what we call the actual users who see our ads or sites. You can either grow your ORGANIC traffic or BUY it. I will definitely write more about traffic generation methods, but for the sake of easy understanding, let me address both ways with a few sentences:
Growing your own “ORGANIC TRAFFIC” is a time consuming process that includes having your own website and producing quality content. However, this approach can yield longer lasting returns while building a sell-able asset. This approach also requires lower investment or almost no investments at all in case you are tech savvy and a good writer.
In case you decide to take the “PAID TRAFFIC” route, you can start serving ads literally in the matter of a few hours. However, the initial loss can be significant and this method requires close monitoring of the performance and advanced tracking techniques.
I’m working with both traffic types, I have some sites that live their own life and I also buy large quantities of traffic (advertising spots) on a daily basis. The organic traffic sites are awesome for passive income, but I make more with paid traffic. They complement each other very well, when I don’t feel like running paid campaigns, the passive sites still make enough to cover my day to day costs 🙂
I will end this post here, the basics have been covered I think. I will write more on the subject in the future posts of course. So in case you are interested in affiliate marketing, make sure to come back or get on my mailing list.