Affiliate Marketing: Make Money on the Internet!
(Or at least understand how other people are doing it!)
OK, I know this isn’t our normal type of topic, but we do have a lot of folks asking about how all this internet advertising and affiliate stuff works. So, here ya go!
You’ve seen them: ads asking you to punch a monkey, claim your free cruise, or spy on the women who apparently, according to the ad, sneak into your home every time you leave. Pretty annoying.
But then there are those sites devoted to certain special kinds of information, like a site reviewing someone’s trip to Hawaii, describing some of the great restaurants and a really cheap hotel. On this site you find ads for low airfare to Honolulu — or links to Hawaiian music you can order and at least pretend you’re basking in the glorious sun on a perfect beach. Pretty tempting!
What’s the difference?
Traditional Ads: The most prevalent ad type on the Internet is cost-per-impression. ‘Impressions’ are the number of times an ad comes up on a web page. For example, every time you go to Yahoo, some company pays Yahoo for the banner ad you see at the top of the page, whether you click on it or not. (Even if you didn’t see it!) The advertisers don’t know who you are or what you’re interested in, but they want as many people as possible to see their ad. This works great for big companies, big websites, and the Superbowl. (Yes, I know the Superbowl is not on the Internet. But it’s the same principle!)
Affiliate Ads: Increasingly popular, however, is the other system: cost-per-action. ‘Actions’ are generally ‘sales’ – so the site with the ad on it only gets paid if somebody clicks on the ad and actually buys something within a set period of time. Say you are reading an article about time management, and you see an ad for a planner. No money has changed hands, even if you click on the ad and find yourself at Franklin Covey. When you end up buying a leather-bound planner and the accompanying filler paper, however, Franklin Covey pays a percentage of the sale to the site you originally came from.
Wait… So what?
There are actually a couple reasons you might care about this. If you own a website, you’re probably paying some money to host it. Even if it’s a free site, you’d like to sell ad space on your site, but nobody’s knocking down your door offering to pay you big bucks to put one of their banners up.
A lot of companies are willing to pay you a commission on sales, though. Check out BeFree  for examples of companies that act as middlemen between you and companies that run affiliate marketing programs.
You can sign up at one of these affiliate management sites and grab ads for whatever companies interest you – if you have a site about movies, or even if you just like movies a lot, you can join the Netflix affiliate program. They’ll provide you with the code for the ads and you just upload it to your site!
Some sites do nothing but host affiliate ads, and some sites make a shocking amount of money doing it. If you host ads that are relevant to your content and interesting to your audience, you can cover all the costs of your site and then some.
The other cool thing about affiliate marketing is that it’s a great way to reward sites you like. Let’s say you’re a big fan of Japanese cartoons and you’ve read a lot about one on a certain site, make sure you click an ad on that site when you’re ready to buy the DVD, comic book, etc. It doesn’t cost you any more, but it’ll sure make the webmaster feel good about the time and effort he’s putting into his site. (And no, I don’t run a site about Japanese cartoons, so this isn’t just a plug!)
~ Tom Dalton