The affiliate marketing company is a major player in the overall marketing game. These companies are a great resource to increase revenue, with low risk, and high yielding returns. Affiliate marketing (AM) is a key element in the sales marketing strategy. The AM company earns a commission by promoting products for merchants, with a performance based, revenue sharing structure.
What is an Affiliate Marketing Company?
The core of the one is the ability to build relationships between the merchant, network, publisher and consumer. These relationships are the foundation for a successful affiliate management agency. The merchant or brand creates the product, the network contains the platform for the publisher, also known as the affiliate, and the consumer or customer is the end user with the purchasing power. The publisher will drive traffic to the brand, encouraging interest and conversation thereby, enticing and influencing the consumer to make a purchase. Affiliate marketing companies, like https://www.iaffiliatemanagemnt.com, use various methods to promote the brand, creating value and ultimately encouraging the consumer of their need or desire for the product or brand.
This company is an integral, but often overlooked part of the sales and marketing team. The brand or merchant benefits with increased revenue, and the affiliate benefits by receiving compensation for their efforts. A small percent of the revenue is then shared by the merchant to the affiliate as a commission based on the affiliate’s performance. This revenue sharing model creates a great incentive for both the merchant and the affiliate, creating a mutually beneficial relationship. In business the most productive relationships are generally mutually beneficial, where each party benefits. This mutually beneficial method of monetization, lowers overall marketing costs, increases total revenue, and is extremely low risk.
How Does an Affiliate Marketing Company Get Paid?
The AM agency has a few options in how they get paid for their unique, but vitally productive marketing services. There are a few types of methods, and each has its benefits. The standard and most common model is the pay per sale format, which is a true revenue sharing method. The pay per sale also known as the PPS method, is when the merchant or brand pays the affiliate a percentage of the sale price of the product after the consumer, purchases the product as a result of the affiliate’s marketing strategies.
Although the pay per sale method is the most common, there are other, more complex methods; cost per action, or CPA and the cost per click, or CPC and cost per mile, or CPM. These methods compensate the affiliate based on the conversion of leads, click and is based on the traffic and conversation created. The CPA, CPC, and CPM methods are not directly related to the actual sale, but it is assumed the more traffic, clicks and conversation created, then the sales will be organically created. The affiliate must persuade the consumer to visit the merchant’s website and complete the desired action — whether it’s filling out a contact form, requesting a trial of a product, or subscribing to a newsletter. While these methods are diminishing, they still have their place in the market, depending on the target audience, and goals of the campaign. For the remainder of this article, we will be referring to the predominant compensation method of pay per sale, or PPS.
The pay per sale method is beneficial for the merchant, as they only pay for converted sales, and the affiliate benefit, is the ability to prove and measure their effectiveness. It is a highly effective method of marketing that incentivizes sales via affiliate marketing. Merchants that incorporate the AM method into their overall marketing strategy, have the ability to outsource a portion of their sales and marketing team, while better allocating their in-house resources. This method of resource management will optimize productivity, and increase revenues, and can be a very effective business strategy. By only paying for the proven result, in this performance based model, the merchant has better control of the company’s overhead, and actual cost per unit sold, which again drives up revenue.
How do Affiliate Marketing Companies Assess Success?
These companies are based on a unique performance based model often based on revenue sharing. With this model, the merchant only pays out on actual sales made through the affiliate links. This method of monetization is a win/win for the industry. There are many benefits to this unique performance driven marketing resource. These companies have the ability to influence the market, by driving up sales, and the brand only pays the affiliate based on proven performance. Due to the fact that the brand only pays based on actual sales, it keeps the overall marketing costs lower, by only paying for productive marketing. Many marketing strategies pay in the hopes of high yielding revenue, but these companies only get paid based on the success of their campaign. This is one of the many benefits of this method of marketing.
Target Audience Optimization
Target audience optimization is another great benefit to affiliate based marketing. The affiliate has the ability to focus on a targeted audience, which optimizes the program’s effectiveness, which directly affects sales. There are numerous methods for the company to optimize their links, often the targeted audience is a very effective method. The most effective affiliates know their audience, and are aware of current trends, and recognizes the; who, what, when, where, where, why and how the target audience can be reached. Recognizing this is a performance based model, allows the affiliate to target the audience, as this is the group with the highest interest in the products. The affiliate is aware that without the purchase, they don’t get paid, they must focus on the target audience, in order for them to take advantage of this revenue sharing model, but that is one of the many reasons this sometimes overlooked marketing strategy is a WIN/WIN!! A win for the merchant, only paying the affiliate marketing company based on performance, and a win for the affiliate, as their performance is proven and can be quantified.
The AM company just makes good business sense. The business economics built into the AM business plan are of great benefit for the brand or merchant, and really work for the consumer market as well. It allows for better exposure of the product and brand, while relating to the target audience, and creating interest and conversation, driving up sales and revenue. It sets the stage for responsible and efficient resource allocation, and becomes an effective business tool that warrants utilization. Don’t overlook this mutually beneficial method of monetization by lowering the overall marketing costs, and increasing total revenue, while incurring an extremely low risk to the merchant.
This type of company shows a lot of promising benefits, with a proven performance based model, based on core relationships that allow for increased target audience optimization. Merchants, what are you waiting for, the affiliate marketing company is a major player in the overall marketing game. It makes good economic business acuity to incorporate it into your marketing plan; IT’S A WIN/WIN FOR YOUR BRAND!