Affiliate Program Networks: Doing The Work For You

Affiliate programs are the ways and instruments wherein online merchants generate profit. These programs are hosted by online merchants but advertised by web publishers. Affiliate network is a group of web publishers and online merchants. The merchants pay a portion of their profit to the website publisher when an end user performs a certain action or executes a transaction that brings about profit for the online merchant.

The idea of affiliate programs was launched in November 1994 by CDNOW when they introduced their BuyWeb service. It was based on the idea that music oriented websites could list albums as well as evaluate those that the users might be looking to buy. These websites would also offer links to CDNOW web site where users could set their purchases for the music CDs.

One of the better and more commonly known examples of affiliate program usage is the website Amazon. Amazon started their affiliate program in July 1996. The associates could put a link or advertisement on their websites and if the purchase was made the associate got paid. Commissions for affiliate programs is made by using Cost per Sale or CPS as a compensation method. Almost 80% of all transactions are done using this. More or less 19 % use Cost per Action or CPA. In these ways the associate or the advertiser must make sure that the customer to the main host site has converted and makes an order.

A new concept in the world of affiliate program network is the multi-tier system. It includes distributing commission by means of hierarchical referral network of sign ups and sub associates. At most two tier systems exist but almost all of the affiliate programs are still single tier. Some web merchants use in house affiliate programs using well-known software while a few merchants choose to go through third party providers. The third party services are generally preferred as they are unbiased in evaluating traffic and sales. Based upon the choice of service used payment is done by merchants themselves or by a third party or affiliate networks on behalf of the merchant.

Now coming to the most interesting aspect of affiliate programs. How to select an affiliate program for a target website? There are basically three ways wherein you can find a related affiliate program. First and the foremost is the affiliate program directories. These are a kind of guide to pre-screened affiliate programs and comprises of affiliate discussion boards, blogs and newbie tools. The second way is to use vast affiliate networks that give the program for thousands of advertisers. This is generally a good way to begin to get the hang of things. Third and the most economical way is to make use of the target website themselves. Generally target websites contain a link titled affiliate program that gives direct affiliate programs, but you have to be experienced enough to know which one would work out the right for you.

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Affiliate marketing has grown by leaps and bounds in the past few years and has proven to be an effective way of generating profits for online merchants by using the concept of revenue sharing between the merchants and their associates or affiliates as they are commonly known as.

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An affiliate network is essentially an intermediate between publishers and merchant affiliate programs. Affiliate networks help publishers or affiliates as they are commonly known, to easily find out the affiliate programs that will generate more traffic and hence more revenue for their websites.

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There are many areas of internet marketing that you can start with, but affiliate marketing still remains popular. With on online affiliate business you can get started with no cost and quickly move up to making a whole lot of money.

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