There are many reasons to start a website (and develop it using tools such as affiliate programs). Boredom, the desire to share your passion with the world, or simply to inform about the latest events in any industry that interests you. The growing number of new sites each day is also associated with the simplicity of setting them up. On the Internet there is no shortage of free sites that provide ready-made tools allowing you to create your own place on the web in just a few simple steps. For more ambitious projects, the time to create and then implement them has decreased significantly.
In the era of strong competition, prices have also gone down, so that with a little will and a small investment we can become owners of an extensive website. However, while building a website is not a difficult process, extending it with valuable materials or creating a database of useful and interesting content for other readers is quite a challenge. It requires spending a lot of time and money. And once we start investing in a website, there comes a time when we start thinking about how to make money on it.
The most common method is to place online ads, in the form of banners, boxes, skyscrapers and other visual forms, displayed on the screens of monitors or mobile devices, in specific places on the site. The problem is that it takes a huge amount of time to find many advertisers whose products or services might fit the theme of the site. In addition, not all attempts to negotiate may be successful if you decide to enter into agreements on your own. With help may come advertising agencies, dealing with affiliate programs, which have been very popular for several years – also in Poland. What are affiliate programs and how do they work? Is this form of advertising worth it? Below we will try to answer the most important questions on this subject.
Affiliate programs – definition
Affiliate programs, also known as partner programs, are special agreements, in which the seller (advertiser) pays the owner of the website (affiliate) a commission for generating traffic. The website owner places links to the merchant’s website on their site (usually hidden under an image form) and then receives (usually on a monthly basis) remuneration according to the agreement made with the merchant. The method of settlement may be determined on the basis of the number of hits on the advertised site with the possibility of receiving additional commission if the customer buys the product. It is less common for such agreements to be settled based on the number of times the advertisement is displayed – this is due to the fact that interested parties do not necessarily have to purchase the advertised product.
How do affiliate programs work?
Affiliate programs work between at least three parties: the owner who places the ads, the affiliate that is the store that offers the products/services and the customer who may become interested in the product after clicking on it. In recent years in Poland, affiliate programs have become so popular that affiliate networks, which collect a large number of advertisements, have joined the ranks. For the website owner, who can boast of a large number of entries, using the services of the network can bring additional benefits. Admittedly, you have to reckon with the necessity of paying commissions, but after signing a contract, you don’t have to worry about acquiring new advertisers.
Before starting an affiliate program you should first of all determine the target group – both visitors to your site and potential interested in the advertisements displayed. For example if you run a website about sports or healthy eating it is worth signing an agreement with an affiliate who offers to display advertisements for this kind of products. Thanks to this you will benefit both from increased viewing figures as well as from higher commissions on ad impressions.
Online stores that are just starting out on the market can benefit in this way. It is also an effective channel for companies that want to advertise their products or services that do not necessarily have to do with online transactions – for example, a car repair company.
How were affiliate programs created?
The first affiliate program was created by the largest bookstore in the world – Amazon. Jeff Bezos, the company’s founder and CEO, created the idea as part of his company’s marketing strategy. How did he manage to develop this idea? The beginnings were not easy and involved a lot of work. It all started with soliciting affiliates to link to books sold through the Amazon store. For each book sold in this way he paid a commission, which motivated other affiliates to continue sharing the content. This was an effective solution, as the companies cooperating with Amazon did not have to do anything more than provide links to the store on their sites. Currently there are over a million affiliates interested in cooperating and the number is growing. It’s no wonder that the competition has seized on this idea and created their own affiliate networks.
Affiliate programs – types of payment
The type of agreement drawn up depends on many factors – page view, target group or interest in a particular product/service. Generally there are three models of payment for affiliate programs and one mixed model:
- Cost per click – the advertiser pays the website owner for each click and unique user’s passage to the website with the advertised product. This model does not take into account the purchase of the product by the customer.
- Cost per lead – the advertiser pays the website owner based on the number of people interested in the product/service. All they have to do is to go to the merchant’s website and fill out the appropriate form, leaving their contact information. In the case of inactivity, the site owner does not get paid.
- Cost per sale – the site owner receives a commission for each product/service purchased by a customer. Just passing through without making a transaction is not included in the commission.
- Mixed – here the fixed monthly remuneration for the affiliate is included as well as a bonus for the generated traffic and the simultaneous acquisition of a base of leads. In addition there are more complex combinations which are used for example by Google on the example of the AdSense service – commission for sales and gaining another affiliate.
Long-term programs are also worth mentioning. This model is mainly used by advertisers who sell on a subscription basis (which involves monthly fees). Cost per impressio, on the other hand, is based on the payment for watching advertisements, by settling with affiliates on the basis of the number of people to whom advertising banners have been displayed – this example, however, is classified as classic Internet advertising, and not as an affiliate program. While we are at it, it is worth noting the differences between these terms.
Affiliate programs and online advertising
Affiliate programs have a significant advantage over standard internet advertising, which should be used when promoting a website and offered products/services. The advertiser pays only for the effect specified in the agreement, which cannot be said in the case of advertising – here there is a high risk of costs incurred, which may not necessarily translate into profit. It is thanks to the reduced probability of failure that affiliate programs are so popular. This is because there is no need to spend money on additional research on target groups that will be convinced by the product. This allows niche sites to benefit that would otherwise have no chance of being noticed.
Affiliate programs offer many advantages to advertisers and affiliates. The first group can thus increase the number of potential clients, while website owners can earn in this way, which is especially important at the beginning of the website’s activity – even a small number of page views will allow you to earn money for e.g. server maintenance fees. It is worth remembering that apart from the pornographic industry, i.e. with content exclusively for adults, you can join affiliate programs in practically any industry.