David Fiske Affiliate marketing & web development musings from Fiske Towers

There has been a few questions banded around the net about what exactly affiliate marketing is. No one (apparently) has come up with an accurate definition. So, it's my turn!

I'll start with the definition of affiliate, then marketing, then affiliate marketing.
 
Affiliate

Wikipedia define an affiliate as "An affiliate is a commercial entity with a relationship with a peer or a larger entity". I don't really agree with that too much.

An affiliate is a person or company that acts on behalf of a merchant. The affiliate holds no stock nor sells stock on behalf of the merchant.

The role of the affiliate is to drive sales to the merchant and as a reward for these sales, the merchant typically pays commission in the form of a percentage of the sale amount or as a fixed sum.

Affiliates compliment the marketing activities of the merchant. A base of 1,000 dedicated affiliates means there are at least 1,000 websites or web pages that promote the merchant. It's similar to viral marketing just on a limited and controlled scale.

The affiliate needs to promote the merchant as best they can in order to drive relevant traffic there to achieve sales.

Marketing

Marketing goes hand in hand with logistics, and this is where I am qualified in.

Marketing is the method of satisfying demand through the supply of a product or service.

Marketing can be broadly summarised as the 4 P's:

• Product
• Price
• Place
• Promotion

Product means that you need the right product (or service). You have to ensure that the product will satisfy the demand of the customers.

Price has to be right in order to achieve sales. Price is a two sided prong in the sense that if it is too cheap, people perceive the quality to be poor and if it is too expensive, it may be out of reach (in terms of affordability) by the people it is aimed at.

Place has to be where the demand is. If you are selling tickets to a show in London, you may struggle to achieve mass ticket sales in the far North of Scotland or in Ireland.

Promotion is ensuring people are aware that you offer the product or service you do.

Affiliate Marketing

This is where you mix the affiliate business model with marketing.

Affiliate marketing is making sure you promote the right product/service, with the right price band, in the right place in order to maximise the sales a merchant makes.

It's as simple as that.

Affiliate marketing could be as simple as putting a merchant's banner on a website with an affiliate link encoded into it.

It could be as complex as parsing data feeds into a site or writing copy with affiliate links nested into it.

An affiliate need not have a website. Many affiliates survive solely from PPC activities or via a blog.

The secret of successful affiliate marketing is ensuring the 4P's are satisfied.

Whenever you add a merchant to your site, make sure the 4P's are met:

• Is it the right product for your audience? Is it complimentary to what you are offering? There is no point in advertising socks if your content is about televisions. Advertising satellite and cable television services is complementary and hence satisfies this 'P'.
• Is the price band suitable for your audience? If you advertise DVD's, what are the chances that a visitor will turn around and go 'actually, I fancy buying a £800 television instead'? If you advertise DVD's, your price band is around £10 to £30 so you are looking for similar relevant products at that price. Complementary products in that band could be all-in-one remote controls, sweets and snacks, DVD rentals, etc.
• Is it the right place to advertise a merchant? By this, I mean will your merchant attract sales via your site? If they are offering a product that people rarely buy online, why bother advertising them? Some merchants publish large print telephone numbers on their site. If your visitor visits the merchant and then calls via the telephone, you get zero credit.
• Are you promoting your site and merchant? If you have never exchanged links or spread the word, how are people supposed to find you? Likewise, if you have a really popular site and you place a merchant banner on it, do you actively promote it? Do you highlight the products or services your merchant is offering? Say you run a satellite television reviews website. Placing a banner for Virgin Media (cable TV) on there is OK but you need to push it if you are looking for sign-ups. You need to highlight in your copy that cable TV also exists and that some satellite TV stations can be seen via cable.

I'm not sure if that has cleared things up for anyone but I would say to anyone contemplating affiliate marketing, remember the 4 P's.

Too often, people forget or just don't think about it and advertise wine on a site about giving up alcohol, or fast food restaurants on a dieting website.

It wouldn't happen in the real world so why do it on the net?