AM Basics with Affiliate.me.uk - UK Affiliate Marketing, Online Promotion and Sales

The concept of Affiliate Marketing is very often misunderstood even by those who are aware of its existence as a new and vital online marketing channel. This could well be due to its use of highly sophisticated adserving and reporting technology and relatively complex and diverse nature when compared to print, TV or CPM advertising. In these examples the publisher / media outlet has a specified rate card and charge for their advertising slots, eg: magazine full page inside front cover per issue, TV 30 second primetime or per 100,000 webste homepage skyscraper impressions. Publishers showing affiliate ads, however, do not generate revenue according to their rate card for ads by the impression or week for those slots. They choose to affiliate with and show adverts for merchants who only pay when a visitor decides to click through to their site and then proceeds to perform an action, typically to make a purchase.

Affiliate Marketing in its simplest form involves a Website Publisher (the Affiliate) running adverts on their site for a Company (or Merchant) on a 'Cost per Action' basis. This action is typically making a purchase but can as easily be in the form of a click through visit, a newsletter signup, a contact form lead, completed order form or any other action that the merchant is prepared to offer a commission payment for. Such a scenario places this model in an altogether different sector from most other forms of online advertising such as the CPM (Cost per Millenium / Thousand Ads shown) or Ads shown for a specified period of time. For the merchant one of the biggest advantages must be that they only pay out for actually useful traffic and completed actions / sales through their sites. A merchant will not be paying for advert exposures that are unproductive in terms of unclicked ads and non conversion into sales.

For publishers with quality content capable of attracting targeted traffic which then proceeds to visit a merchant's site and convert into actions that trigger commission payments this advertising model works well as a high conversion rate equates to a higher earning per click and per ad impression. Many of the most popular content siites on the internet carry affiliate ads related to their topics.

Both Affiliate and Merchant benefit in AM from the fact that there is a big incentive where a successful ad placement has to be well thought out, related to site content and presented to a targeted audience. A well converting, action generating advert is beneficial to both parties.

This kind of advertising model is highly appealing to both publishers of quality content and merchant companies committed to ethical advertising and revenue generation. Within the UK a great number of high street names have extensive Affiliate Marketing activities, including Dixons Stores Group, Boots, HMV, Argos, Carphone Warehouse, My Travel, MBNA plus many other well known and respected brands such as Butlin's and Virgin Atlantic, just to mention a few. AM, however, also allows even the smallest merchant to expose their products and brands to a wide ranging audience across a variety of sites, whilst knowing that expenditure will be determined by actions or sales. If the merchant's payment model has been properly thought out and viable in terms of residual profit for them a high marketing bill will have come about as the result of volume affiliate driven sales and accompanying profits far outweighing the outgoing commission payments.

Depending on merchant and sector specifics the % commission on sales will vary dramatically, although typical exampkles for a few would include Flighs 1 - 1.5%, Computer Components approx 3-4%, General Retail, Gifts and Leisure Goods 5-10%, Flowers 10%, Internet / Online Electronic Services 15%+ all the way to some very low production cost items such as ecourses which will typically approach or even exceed a 50% commission payment.

Affiliate Marketing Basics