Affiliate Marketing is Revenue Sharing
One of the most popular and undeniable methods of earning money online is the setting up of an affiliate marketing business. Anyone who is determined, resourceful, and willing to learn can become successful in affiliate marketing. But how can affiliate marketing results to earning money? First, the business of affiliate marketing can be described as a joint effort of two businesses. That is, affiliate marketing is basically a relationship between two businesses which common purpose is to increase visitor traffic. One business is called the Advertiser, and the other is called the Publisher or the Affiliate.
The financial relationship of the Advertiser and the Publisher is based on revenue sharing. The Advertiser will place ads in the website of the Publisher. These ads are links towards the website of the Advertiser. And when a visitor clicks on the link, the Advertiser will pay the Publisher. The payment or compensation given to the Publisher will be based on any of these arrangements.
Cost Per Click
In “cost per click” or CPC, the Advertiser has arranged to pay the Publisher or Affiliate each time a visitor ends up in the Advertiser’s website from the link in the Publisher’s website. What actually happens is that the Publisher has articles or products that have attracted Internet users. And while the Internet user is in the website of the Publisher, this Internet user will be aware of the existence of the Advertiser’s website.
In the ads or banner of the Advertiser, there will be one or two sentences that will entice the Internet user to visit the Advertiser’s website. Of course, the Advertiser may have several Publishers and it will have a system that will identify which Publisher has referred the visitor.
Cost Per Lead
In “cost per lead” of CPL, the visitor that was referred by the Publisher must sign-up or fill-up a form before the Publisher is entitled to a commission or compensation. When the visitor signs-up, he becomes a lead for the Advertiser to more target clients. Since a lead is more valuable than a simple visitor, the compensation given to the Publisher for each lead is relatively higher than the pay for each visitor.
Cost Per Acquisition
In “cost per acquisition” or CPA, the visitor that was referred by the Publisher decides to purchase the products or services from the website of the Advertiser. The visitor becomes a paying customer. When there is a paying customer, the Advertiser earns income. And when the Advertiser earns income, a part of it is shared with the Publisher in the form of a commission.