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Posted: 06 Jul 2009 07:11 AM PDT

What is Affiliate Marketing?

It seems that more readers are asking this question than I previously thought.

In a recent poll here on ProBlogger I asked readers whether they’d done any affiliate marketing on their blogs. The results revealed that:

29% of readers regularly do it
24% occasionally do it
27% have never done affiliate marketing on their blogs
6% used to do it but don’t any more
14% don’t know what affiliate marketing is

There’s some interesting results there but it was the last category (of bloggers not knowing what affiliate marketing is) that I wanted to write this post for with the hope of answering the question. It’s pretty basic and quite beginner focused but for the 14% of you who don’t know what affiliate marketing is - here’s a brief introduction.

What is Affiliate Marketing?

Perhaps the simplest way to explain affiliate marketing is that it is a way of making money online whereby you as a publisher are rewarded for helping a business by promoting their product, service or site.

There are a number of forms of these types of promotions but in most cases they involve you as a publisher earning a commission when someone follows a link on your blog to another site where they then buy something.

Other variations on this are where you earn an amount for referring a visitor who takes some kind of action - for example when they sign up for something and give an email address, where they complete a survey, where they leave a name and address etc.

Commissions are often a percentage of a sale but can also be a fixed amount per conversion.

Conversions are generally tracked when the publisher (you) uses a link with a code only being used by you embedded into it that enables the advertiser to track where conversions come from (usually by cookies). Other times an advertiser might give a publisher a ‘coupon code’ for their readers to use that helps to track conversions.

For example: when I recently released my 31 Days to Build a Better Blog Workbook I also give people an opportunity to promote the workbook with an affiliate program whereby they could earn a 40% commission for each sale. When you sign up to become an affiliate you are given a special code unique to you that enables you to promote the workbook and make $7.98 per sale. The top affiliates earned over $2000 in the first few weeks after launch through these commissions.

Advertisers often prefer affiliate marketing as a way to promote their products because they know they’ll only need to pay for the advertising when there’s a conversion. I knew when I started this affiliate program that while I’d earn less for each sale that having a network of affiliates promoting it would almost certainly increase overall sales levels.
Publishers often prefer affiliate marketing because if they find a product that is relevant to their niche that earnings can go well in excess of any cost per click or cost per impression advertising campaign.

Why Affiliate Marketing Can Work Well on Blogs

Affiliate marketing isn’t the only way to make money from blogs and it won’t suit every blog/blogger (more on this below) but there are a few reasons why it can be profitable in our medium. Perhaps the biggest of these reasons is that affiliate marketing seems to work best when there’s a relationship with trust between the publisher and their readership.

I’ve found that as this trust deepens that readers are more likely to follow the recommendations that a blogger makes.

Of course this can also be a negative with affiliate marketing - promote the wrong product and trust can be broken (more on this below).

Affiliate Marketing - Easy Money?

While affiliate marketing can be incredibly lucrative it is important to know that affiliate marketing is not easy money. Most people who try it make very little as it relies upon numerous factors including:

traffic (high traffic helps a lot)
finding relevant products
finding quality products
building trust with your readers
having a readership who is in a ‘buying mood’
you being able to write good sales copy (and more)

There’s also some risk associated with affiliate marketing in that if you push too hard or promote products of a low quality you can actually burn readers and hurt your reputation and brand.

It’s also worth noting that affiliate marketing doesn’t work on all blogs. Some blogs are on topics where it is hard to find products to promote - other blogs attract audiences who are not in a buying frame of mind and for other blogs it just doesn’t fit with the blogger’s style or approach.

Tomorrow I want to continue the focus upon affiliate marketing with another post - this one on how to find affiliate products to promote.

Post from: Blog Tips at ProBlogger.