Affiliate Marketing is a great way of promoting online business for a merchant, through affiliate programs and advertising that pay the affiliate (or publisher) a commission based on the amount of business their website brings to the merchant company.
It’s a form of revenue sharing or commission based advertising. It is very common now, and provides a great opportunity for both merchant and affiliate.
Affiliate marketing is the most cost effective sort of marketing there is, and is actually incredibly efficient. For this reason, many companies (especially those that started in the early days of e-commerce) owe a tremendous amount to affiliate marketing (amazon.com is a good example of this phenomena) and it has now become normal for many companies to include affiliate marketing in their plans.
There are three types of compensation methods that are associated with affiliated marketing. The first type is Cost per Click (CPC) or Cost per Mil (CPM.) Basically, the affiliate earns by how many clicks the advertising on their web-site, or by just having the advert published on the website. But because of click fraud and many other questionable tactics, CPC is no longer the general form used for affiliate marketing.
Generally, companies now either use CPA (Cost per Action) or CPS (Cost per Sale.) The first is based on how much the advert generates interest by the clicker to actually buy or register at the advertised site, the second is based strictly on sales. In other words, an affiliate is paid if the clicker actually purchases something on the advertised site.
For a great example of an affiliate system, see Amazon.com and their excellent "associates" program, which is entirely free to use. You can make money with Amazon.com using a Blogger blog like this one . . . it's REALLY easy!
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