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What Is Affiliate Marketing- Overview

The official Wikipedia definition of affiliate marketing is...

"Affiliate marketing is a method of promoting web businesses in which an affiliate is rewarded for every visitor, subscriber, customer, and/or sale provided through his/her efforts. It is a modern variation of the practice of paying a finder's fee for the introduction of new clients to a business. Compensation may be made based on a certain value for each visit (Pay per click), registrant (Pay per lead), or a commission for each customer or sale (Pay per sale), or any combination."

This is an accurate but very broad definition of affiliate marketing. Today affiliate marketing is growing by leaps and bounds and successful affiliates run the gamut from one-person part-time businesses to very large corporations with hundreds of employees.

Some affiliates do no more than ad simple banner links to their sites while others do detailed product reviews and sophisticated branding for merchants. And one way works far better than the other.

Affiliate Marketing is still a relatively new area in E-commerce.Variations of using one web site to drive traffic to other web sites have been around since the mid '90s but it's only in the last few years that the concept has reached critical mass and experienced wide acceptance online as a way to promote your product or service.

The payment models vary from simple commissions on sales to flat-fee payments for membership sign-ups to payment for sending clicks of traffic to a merchant. By far the most common is CPA or pay for a sale or action.

Whatever the model the numbers add up. MarketingSherpa says that affiliate payments were over $6.5 billion in 2006.

The reasons for its growth are varied. The simple concept of providing traffic to another web site via links makes good business sense. A merchant only pays when an affiliate click results in a sale or action. This makes the arrangement very attractive to merchants who can easily track sales and therefore costs.

The arrangement is much like a sales person who gets paid only from commissions earned on actual sales. From the merchants' point of view, with no health benefits or expenses to provide, affiliate marketing has a very low customer acquisition cost.

Although affiliate marketing offers great opportunity it is getting more sophisticated and complex all the time. Payment models are changing, marketing techniques are more varied and what it takes to drive traffic to a web site is always evolving. Staying abreast of the latest developments and learning advanced concepts is becoming a full-time job.

Web 2.0 has added new wrinkles to promotional strategies. Social networking sites like MySpace.com and Facebook.com and YouTube.com have changed the marketplace and brought new ways to reach prospective customers.

If it feels like the train is moving down the track before you've even had a chance to get on your not alone, But you better get to work. This educational section will help with the basics of affiliate marketing and some advanced concepts too.

We'll also offer our suggestions on what it takes to be successful in today's ever-changing online marketplace. Click on the navigation bar to the left to begin your journey.

We would recommend a thorough review of the language and terminology of affiliate marketing as a start. Move through the basics to advanced concepts as you feel ready. Good luck on your journey.