Have you always wondered what that thing called “affiliate marketing” is, and why it’s such a buzzword on the Internet? Well, imagine advertising on steroids and that’s what affiliate marketing is.

Affiliate Marketing, to a website publisher, means putting up advertisements up on his or her website, in exchange for revenue whenever someone clicks on the advertisement, or for a sale that was made through clicking the link on the website publisher’s ad space. The ads can be in the form of text links, images, or in the case of Google Adsense, “contextual links.” Usually, those who take advantage of this kind of service are other website owners themselves, or else brick and mortar businesses who want to take their advertising to a different level.

From the points of view of both advertiser and affiliate marketing partner/publisher, affiliate marketing is a win-win setup. For the advertiser, this setup is advantageous because this is a performance-based setup wherein he or she will only need to pay whenever a click is done on the link, or whenever a sale is made. For the publisher, of course, the revenue-sharing incentives are the prize for the business relationship.

The major sites that advocate this kind of program have made affiliate marketing popular. Amazon Associates, for example, are very popular among bloggers, because the incentives include credits for Amazon.com merchandise.

Yet most bloggers and website owners prefer to go for the affiliate networks that act as middlemen for affiliate marketing. The most famous of these is ClickBank. The advertisers do not actually deal directly with the website owners themselves. Rather, they deal with, say, ClickBank, and then ClickBank is the one that pays the website owners for the clicks or the purchases made through their websites.

There are several kinds of Affiliate Ad systems, and these include the following: CPA, CPC, CPM/CPI.

1) CPA or Cost Per Action is the kind of Affiliate Ad system wherein the website owner earns only if there was a sale that was made. The best example for this would be the Amazon Associates program, as they would only pay the website owner a commission per sale made through a click from the said website. The other variants of CPA include CPL or Cost Per Lead, and CPS or Cost Per Sale. A “lead” is defined by having a person sign up for a free registration from a click made on the advertising affiliate’s site. And sale, is, well, self-explanatory.

2) CPC or Cost Per Click is paid per click done on an ad. An example of this would be the Google AdSense program. To the advertiser, it would be Google AdWords, but to the website owner/publisher, it’s called Adsense. The website owners are paid per click a site visitor does on the Google Ads. Aside from this, Google also does:

3) CPM/CPI or Cost Per Impression is paid by the number of impressions, or website visits or hits. This is calculated by the thousands, and paid for a few cents per certain number of visits or hits, as in Google Adsense.

There are other online advertising options, like paid text link ad markets and advertising bidding marketplaces. The objective is basically the same: to get exposure for the advertisers. On the whole, affiliate marketing is ventured into by website owners because it’s pretty much a lucrative source of passive income. One that some people can actually make a good living out of. In fact, a 17-year-old girl reportedly became a millionaire through Google Adsense. It’s a win-win situation that surely no one wants to lose out on.

Source by Nic L.C.