Short & Sweet #7
Affiliate marketing is a online marketing discipline where website operators (affiliate/publisher) place advertising links or banners of a third party (merchant or advertiser) on their own website.
If these advertising measures lead to the desired success (click, purchase by user or lead), the website operator receives an appropriate commission. The performance measurement and commission payment can be based on different concepts and will be clarified in advance between publisher and advertiser.
- Cost-per-Click (CPC): Click at the link / banner by the user
- Cost-per-Lead (CPL): Contact of the user with the affiliate, e.g. by a call or by sending an e-mail / contact form.
- Cost-per-Conversion (CPC): The user bought the product/service after clicking on the link/banner.
By using cookies, which are set when clicking on the banner or link, and by using appropriate tracking tools, these key figures can be recorded and evaluated. Depending on the structure of the commission model and tracking, the commission can also be paid for future purchases. In most cases, cookie times of 30 days are set up.
Benefits Affiliate Marketing:
- Costs only arise with click, lead or purchase
- Wide range of affiliate programs
- Target group-specific addressing through the selection of the suitable advertisers for each target groupι
Disadvantages Affiliate Marketing:
- Lack of success or revenue guarantee for publishers or advertisers
- Advertisers are dependent on the (technical) quality of the target page for payment models such as cost per lead or cost per conversion
Affiliate Marketing in Practice:
In Germany, the market for affiliate programs is divided between two big players and several small to medium-sized networks. Awin and Affilinet offer the largest base of partners, but also charge relatively high initial setup fees. With the smaller providers, the initial costs are usually manageable, but in most cases there will be less turnover.
Smaller affiliate programs that are not run professionally also carry the risk that the selected publishers do not fit the brand or the product. Therefore one should carefully select the suitable programs and/or publishers and continuously check the approved and participating affiliates. It also makes sense to establish clear publisher guidelines regarding brand protection. Furthermore, it is advisable to keep a close contact with the publishers to ensure a common understanding between all parties.