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Here at PiggyBankPie we’ve only touched on affiliate marketing briefly previously when we interviewed Affiliate Student. However, as I now actually work in affiliate marketing we‘ll start to cover more affiliate marketing topics, particularly as it’s one of the best ways to make money online. There are no stock issues, product lines or customer enquiries to worry about. With affiliate marketing it’s just you and your site.

Affiliate marketing is certainly big business. Back in 2006, according to MarketingSherpa, it was predicted that affiliates worldwide would earn over $6.5 billion in commission. You can safely assume that this was close to $10 billion last year, although I wouldn’t be surprised if this figure wasn’t actually surpassed.

Why Try Out Affiliate Marketing?

The great thing about affiliate marketing is that you can dip your toe in the water without getting burnt. It doesn’t cost much money to try it out and only once you discover a program which converts well do you have to commit to spending a larger chunk of money. Even then, you can always choose to stay on the low cost promotion route.

There are also a huge number of niches out there, so although there are numerous affiliates across the internet as a whole, there are still many low competition niches where money can be earned.

Affiliate marketing also offers the ability of earning a residual income. Once you own a highly optimized site you can often earn continual recurring income without much additional work. And as was mentioned above… you don’t have to worry about checking emails from customers or faulty products. You simply generate the sales and receive commission. Everything else is dealt with by the merchant.

The Language

• Affiliates / Publishers - these are those people who promote affiliate programs and are the ones who earned $6.5 billion in commission back in 2006. Typically Affiliates create websites around specific niches, before promoting them and receiving commission from any sales generated.

• Merchants / Advertisers - these are the companies who want affiliates to promote their affiliate programs. Perhaps the highest profile merchant of them all is Amazon, with over 100,000 affiliates worldwide.

• Affiliate Networks - these networks sit between the Affiliate and the Merchant. They typically create the tracking links, track sales and pay commissions to Affiliates. Merchants use Affiliate Networks for their independent tracking and large database of Affiliates, although some Merchants, such as Amazon with their Amazon Associates program, choose to keep their affiliate program in-house.

Strategies

Typically, you can promote affiliate programs through two main strategies:

• Direct-To-Merchant (DTM) - this is the simplest way to promote an affiliate program. It involves sending traffic directly to the Merchant’s website through advertising on search engines. The majority of affiliate programs don’t allow this but some high profile sites do, including Amazon.

• Through Own Website - the usual way to promote affiliate programs is to set up a website, add affiliate links, and promote the site, often through PPC and SEO. The advantages of this approach are that you’re creating a site with real value and you can receive free traffic from search engines. The downside is that this approach does tend to be more time-consuming, although if you’re looking to set up basic affiliate sites then an excellent website builder is Moonfruit which we reviewed recently.

A third strategy, email marketing, can be used but its effectiveness is in decline and it tends to only work well when the list is build up internally through the use of a website.

Types of Affiliate Sites

• Comparison Sites - think PriceRunner.co.uk which earns its money through users clicking on its links and making purchases elsewhere. Consumers online are often price conscious and looking for the best deal, which is where price comparison sites come in.

• Voucher Sites - this is a massive growth area with consumers frequently searching online for a voucher code before making a purchase.

• Simple Landing Pages - these usually involve finding a high converting affiliate program, building a basic website, buying traffic through PPC, with the aim of sending visitors straight on to the Merchant’s site. Google’s Quality Score has made this more tricky but it can certainly still be done.

• Content Sites & Blogs - this involves building up a large readership before integrating relevant affiliate links and offers.

• Product Review Websites - these work for products which people research before purchasing, such as electronics, and typically work best when combined with a price comparison service.

• Email Newsletter Affiliates - by renting an email list or building one yourself you can then promote relevant affiliate offers to the database. With email response rates dropping over recent years and the increase of spam this is one technique which I’d tend to avoid (unless it‘s a list of subscribers from your own site).

• Cashback Sites - similar to voucher sites except that they split commissions earned between themselves and their members.

How To Start

The best way is to head over to one of the affiliate networks, such as Commission Junction or TradeDoubler, and see what programs are available to promote. Programs can be sorted according to Earnings Per Click (EPC) or Conversion rates so you can quickly view the high performing sites and sectors.

If you haven’t already then I’d also recommend checking out the forum Affiliates4u where a huge number of Affiliates and Merchants participate.

Have you tried out affiliate marketing? What types of sites have you had most success with?

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