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Revenue Generation

How to Make Affiliate Programs Work

The following discusses issues to consider for maximizing the money making potential of affiliate programs.

The Basics

What are Affiliate Programs?

Affiliate programs, also known as associate and partner programs, offer you, as a web site owner, the opportunity to earn money from your online operations ... for free.

How / Where do I obtain an Affiliate Program?

Many major web businesses, such as Amazon and Barnesandnoble, offer affiliate programs. You can apply to them directly. Or, you could sign up with what we refer to as third-party affiliate program providers, such as Commission Junction, Google AdSense, LinkShare and Reporting.Net / Be Free. There exists no financial obligation on your part to use the affiliate services provided by these third-party representatives. (We use all three, by the way.) In fact, because of the convenience they provide in terms of congregating and managing numerous affiliate programs via one source, as well as their supposedly unbiased accounting of web traffic, click-thrus and sales, it is probably best to go through one (or all) of these providers as opposed to going directly to the individual sponsors.

What are the basic requirements for participating in an Affiliate Program?

The basic requirements on your part for participating in an affiliate program are:

  1. You must have a web site,
  2. Your web site should have content of some sort, and
  3. You must place on your web site a special image link and/or a special text link that links back to your "sponsor."
When entering into an affiliate relationship with a sponsor, they will provide you (the affiliate) with an unique html code that you will place on your web site that links to the sponsor's site. This code uniquely identifies your web site as the affiliate which is sending traffic, and potential clients, to the sponsor. The sponsor (or third-party representative) records and keeps track of any traffic you send to the sponsor. In addition, they keep track of any purchases made by that traffic on the sponsor's site.

How do I earn money from an Affiliate Program?

Affiliate programs vary greatly, from sponsor to sponsor, in how you earn money. Affiliate programs can be largely classified into the following types:

  • Unique click-thru, where you are paid a fixed fee (anywhere from US$ 0.01 to US$ 0.50 and more) per unique hit (click-thru) to the sponsor's site.
  • % one-time, where you are paid once, usually a percentage or flat fee, for a sale made on the sponsor's site to a customer who came from your site.
  • % recurring, where you are paid monthly (or quarterly, or whenever a "subscription" is renewed) a percentage or flat fee for a sale made on the sponsor's site to a customer who came from your site.
The unique code that the sponsor (or 3rd party representative) provides you to place on your web site allows them to keep track of when you send them traffic, and allows them to record when that traffic makes a purchase on the sponsor's site.

Typically, a sponsor will hold payment until some minimum amount has been earned. US$ 50 is a common amount. You can request that the amount is higher for the purpose of minimizing currency exchange fees and any other transanction fees.

Implementation

OK, I enrolled in an Affiliate Program, now what?

Your sponsors and third-party representatives will have various recommendations on the approach you should take in promoting their products and services on your site(s). Though image-based links to sponsors may look cool, studies indicate that text-based links work better in ensuring a sale, and therefore a commission.

A common and over-used approach is to simply provide a very general link to a sponsor. For example, many sites, no matter their content, will put a simple image-based link to Barnesandnoble's main page (or Amazon's main page), like the link below:

barnesandnoble
barnesandnoble.com

There exists a couple a problems with this approach. First, the image is not "sexy." Second, the great majority of the public already knows Barnesandnoble and Amazon and all those other first-movers. If the general public wants to buy a book, the general public knows they can go directly to Barnesandnoble.com and Amazon.com; the general public does not need to click on your link. In essence, what the above simple image-based link accomplishes is to effectively increase the brand-awareness of your sponsor - and that's it, no sales directly attributed to you, no commisions earned.

A much better approach is to offer your web site visitors products and services that are considered complementary to the content of your web site. And instead of linking to the general home page of your sponsor, you should link directly to that specific complementary product or service.

Complementary Products and Services

Let's suppose your web site's main activity is in providing information on how to make money on the Net. A complementary product would be a book on this topic. Instead of linking to Barnesandnoble's main page, you should link to the particular book, for example:

online $
Neatest Little Guide to Making Money Online
provides practical advice for Internet beginners who want to explore the new online frontier.

    Price: $10.36
    Retail Price: $12.95
    You Save: $2.59 (20%)
    In-Stock: Ships within 24 hours
    Format: Paperback, 224pp.
    ISBN: 0452281687
    Publisher: Dutton/Plume
    Pub. Date: December 1999


Finding a book that complements the content of your web site represents the easist approach towards maximizing the potential of an affiliate program. But, one does not need to be limited to just advertising specific books.

For example, suppose you have a hip web site that provides reviews of wines, or news on the wine industry. You certainly could link to a specific book on wine, such as "Wall Street Journal Guide to Wine", but frankly, that might appear too conservative, rather dull and not of much interest to your particular viewers. You should consider trying to sell a specifc wine, or perhaps an accessory to drinking wine such as special wine glasses, scented candles ... or chocolate body frosting? Consider the following examples:

Example 1 - General image link to sponsor's main page.

wine.com


Example 2 - Specific product link, with text description.

Beringer Beringer 1997 Knights Valley Cabernet Sauvignon is year in and year out one of the most consistently good, reasonably priced Cabernet Sauvignon's you could buy from California. This version from the stellar 1997 vintage beautifully shows off the ideal growing conditions and perfectly ripe fruit this vintage offered.


Example 3 - Specific product link with special accessories, and interesting (i.e., sexy) text description.

Red LoveAddicted to Love. Add artistic flare to your sweetheart's chocolate and romance addictions and you'll have the perfect romantic gift. A scented candle, a bottle of red wine and a jar of chocolate body frosting ... this gift pack makes the perfect Valentine's Day getaway.



In the above examples, which one would you more likely click on (if you haven't already)? Our in-house testing has shown a great interest in the third example (specifically, the chocolate body frosting).

If you click on any of the above links, you will be delivered to that sponsor's web site, where you could purchase the particular product advertised. And if you are to purchase a product, then we, People's Ware, would receive a commission. This is how affilate programs work.

Additional Considerations - Content Resources

One of the most difficult aspects of operating a web site, and making that web site work, is in providing fresh, original updated content. If your web site's content doesn't change, is not dynamic, but remains static, then people who have visited once or twice, may never visit again if they know nothing new will exist on your site.

One approach to overcoming this difficulty is to outsource some of your content creation. And the easiest way to do this is to employ an online news service, or other 3rd-party script. We list 3 content resource providers here.

For example, you could create a financial news and information site, as we did here: Investaholic.com, where the content exists almost entirely of free news services (which are updated every day, throughout the day) and affiliate program links.

In addition to changing and updating your content, you should also do what is often referred to as "rotating" your banners. In other words, change your advertisements. Change the books you try to advertise, change the wine, change the accessories. Chocolate body frosting one day, strawberry body frosting and maple syrup the next. Keep your content fresh as well as your advertisements for your affiliate programs.

Summary - Next Steps

In summary, when using affiliate programs, give significant consideration to finding and advertising products and services that are complementary to the content of your web site. Specific books (not just the main bookstore home page) are always the first and easiest items to complement your site, but also consider other products and accessory items. As another example, we provide web hosting solutions, so at times we will promote various computer items and accessories (e.g., Dell or Mac Computers, Palm Pilots) or site management software (e.g., Webtrends). And if you're at a loss for providing timely updated content, then seriously consider using 3rd-party content providers.

But, if you really want to make your web site work, then you need to do promotion, and then more promotion, and then even more promotion, and that is another topic entirely. Web Position, Overture and SureList can help you get started with this.



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