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Making Affiliate Program Networks Do The Job For You
Affiliate programs are the means and tools by which online merchants generate profit. These programs are hosted by online merchants but marketed by web publishers. Affiliate network is a group of web publishers and online merchants. The merchants pay a portion of their profit to the website publisher if an end user does a particular action or completes a transaction that leads to profit for the online merchant.
The idea of affiliate programs was launched in November 1994 by CDNOW when they introduced their BuyWeb service. It was based on the idea that music related websites could list albums as well as review those that the users might be interested to purchase. These websites would also offer links to CDNOW web site where users could set their purchases for the music CDs.
One of the better and more frequently known examples of affiliate program use is the website Amazon. Amazon launched their affiliate program in July 1996. The associates could place a link or banner on their websites and if the purchase was made the associate got paid. Commissions for affiliate programs is made by using Cost per Sale or CPS as a compensation method. Nearly 80% of all trades are done using this. About 19 % use CPA or Cost Per Action. In these methods the associate or the advertiser must make sure that the customer to the main host site has converted and makes an order.
A new idea in the field of affiliate program network is the multi-tier program. It involves distributing commission using hierarchical referral network of sign ups and sub associates. At most two tier systems exist but almost all of the affiliate programs are still single tier. A number of web merchants use in house affiliate programs using well-known software while some merchants prefer to go through third party services. The third party services are generally preferred as they are unbiased in evaluating traffic and sales. Based upon the choice of service used payment is done by suppliers themselves or by a third party or affiliate networks in support of the merchant.
Now coming to the most intriguing part of affiliate programs. How to choose an affiliate program for a target website? There are basically three ways wherein you can find a related affiliate program. First and the foremost is the affiliate program directories. These are a sort of handbook to pre-screened affiliate programs and include affiliate discussion forums, blogs and beginner tools. The second way is to use vast affiliate networks that give the system for hundreds of advertisers. This is normally a good way to start to get the hang of things. Third and the most cost effective way is to use the target website itself. Generally target websites contain a link titled affiliate program that gives direct affiliate programs, but you have to be experienced enough to understand which one would work the best for you.
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