How Do I Affiliate With Thee? Let Me Count the Ways.

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Also known as associate programs, affiliate programs are one of the most effective ways of advertising online. Simply put, they consist of an arrangement through which merchants pay outside (affiliate) sites a commission to send them traffic. The payment is generally based upon the number of people redirected through banner links, or upon the number of redirected visitors who spend money at the merchant’s site.

Whether you’re try to expand the client base for your retail site, or generate a profit from all the visitors to your content-rich web page, an affiliate program may prove to be both efficient and practical. Most likely, you will want one of the three following payment arrangements:

Per-per-click: Companies with these programs pay the affiliate for each customer who "clicks though" to the merchant’s site. The affiliate gets paid regardless of whether or not the referred visitor buys anything. This is probably the most common affiliate relationship.

Pay-per-sale: In this arrangement, the merchant pays an affiliate only if the referred customer makes a purchase. The payment may either be a flat fee, or a percentage of the sale. Amazon was one of the pioneers of this kind of program, and it contributed greatly the growth of the books giant.

Pay-per-lead: The true "referral" program, a pay-per-lead arrangement doesn’t pay for sales or clicks, so much as it pays for customers. Visitors to the site are asked to supply some personal and/or market data, and if they comply, the referring site receives a commission. The merchant site may then resell the customer information to other companies, although this is certainly not true in every case.

As an added incentive, many merchant sites offer various long-range development plans. Essentially, these reward affiliates for referrals that are particularly fruitful. One of these arrangements is the two-tier program, which operates like pyramid, or multi-level, marketing. In other words, in addition to getting paid for new traffic, affiliates also receive a commission for each new affiliate that they recruit, expressed as a percentage of the second affiliate’s earnings. Similarly, residual programs continue to pay affiliates for visitors’ activities after the initial referral.

Although affiliate programs vary greatly - these are only a few of the options - they share one advantage over traditional banner campaigns: they are far less risky. Advertisers who pay on the basis of impressions ultimately don’t know if their dollars are being well spent, and have no guarantee that their ads will attract new customers. On the other hand, affiliate relationships trade on information as much as they do on airtime. They offer companies direct, detailed information about where customers are coming from - and also provide the security of knowing that each advertising dollar is buying a real customer. And as they say, a bird in the hand is worth two in the bush.