I. Overview of Topic
Online affiliate programs constitute the new gold rush, and like all previous gold rushes it's mainly the people selling the picks and shovels that are getting rich.
You're more likely to earn $100,000 next year as a web designer (provided you're really good), a web hosting entrepreneur, or, best of all, a "web marketing guru" than you are as one of the toiling legions of affiliate marketers.
But just as some people did strike it rich panning for gold in California around the turn of the 20th century, so a lucky few are doing the same thing panning for affiliate sales on the Internet at the turn of the 21st. At any rate "affiliate marketing" is one of the most often-searched-for keyword phrases entered into Google. So is "online affiliate programs." There are, it seems, hundreds of thousands of would-be Internet marketers out there who want to know how to turn their time into gold by joining the affiliate marketing rush. Consequently there are hundreds of websites and "how to" books available nowadays on the subject. I'll give you the basics very briefly below and you can then decide if this is something you may wish to delve into further.
A FEW BASICS ABOUT ONLINE AFFILIATE PROGRAMS
Affiliate marketing means promoting a company's products on the Web and receiving a commission for sales of those products (or for some other result, such as getting them sales leads).
On paper it sounds like easy money. You set up a website, become an "affiliate" for a product that seems like it has a good market, then run ads for the product on your website. Whenever someone clicks on one of the ads and buys the product, you earn a commission. Simplicity itself.
If you're not at all familiar with this method of making money on the Internet, you're probably wondering, "Okay, so how do I get to be an affiliate for some company's product? And once I'm an affiliate, where do I get the ads? And how do I get paid?"
Before I answer those let me share a dirty little secret about affiliate marketing with you. In the past many companies which offered affiliate programs didn't pay their affiliates, or, more commonly, underpaid them. Suppose you promoted ABC Company's widgets on your website and received $1000 worth of orders in a month. The company has promised to pay you a 20% commission. So you should receive $200. Trouble is, nobody but the company really knew how much your sales were, in many cases. They might actually pay you $50, therefore, or nothing. You wouldn't know you were being hoodwinked.
Nowadays there's an easy way to avoid that problem, and this answers the questions posed above. You become an affiliate through an affiliate network like Commission Junction or LinkShare. These networks represent hundreds or thousands of companies. You pick the companies on the network you want to promote and your commissions are tallied by the networks, not by the companies whose products you're promoting. You receive your payments directly from the networks. In my opinion, this is a huge improvement - at least in this way you can be sure you'll get paid for your efforts.
So the answer to the first question above, "How do I get to be an affiliate for some company's product?" is you join an online affiliate program. This is actually pretty easy. Just go to Commission Junction or LinkShare - which are the two biggest - and sign up. You do need a website, however.
Once you're accepted by either of these networks, you then review their lengthy lists of companies which offer affiliate programs through them. You'll be looking for good programs that offer products or services that will appeal to the visitors to your site. So for example, if your site is about personal finance, you might want to run ads for personal loans, insurance, home refinancing, Internet banking, etc.
You'll notice that some companies' affiliate programs pay you only for actual sales (i.e., $20 for selling a car insurance policy) whereas others pay you for leads (i.e., $20 for a potential customer filling out an application for a car insurance policy). Guess which of these two types of affiliate programs is more profitable. The latter is almost inevitably far more profitable. So you should, initially at least, only promote programs in which you get paid for leads, not for actual sales.
The way it works is this: You select one or more online affiliate programs which appeal to you, then you apply to become an affiliate of those programs. In some cases, you'll get approved automatically. In other cases, you'll receive an email later either accepting or rejecting your application. (The company may have a policy of not accepting "new" websites, or may not accept websites in certain fields, etc. -- thus a possible rejection.)
Once you're accepted into a few programs, you then go back to the affiliate network's website (i.e., the site of Commission Junction or LinkShare) and copy the HTML code for the banner ads or other types of ads you'll be putting on your website (this HTML will have a tracking code appended to it so that you can get paid your commissions).
Once you put these coded ads onto your website you're in the affiliate marketing business. It's now just a matter of waiting for some of your visitors to click on those ads, then purchase the products or fill out the application forms. Every time this happens you get credited for the stated commission. The networks generally send out checks monthly.
Sounds great. Unfortunately... there are some problems.
WHY AFFILIATE MARKETING USUALLY DOESN'T WORK
Despite much breathless hype by marketing gurus, most people who try affiliate marketing never make any money. Why not?
Because most website visitors don't click on banners anymore. We're all really jaded when it comes to banners, we seldom even look at them, and only in very rare instances do we actually click on them and buy something.
And there's another problem: getting traffic to your website. In order for affiliate marketing to have any chance at all of working you need a considerable amount of targeted traffic to your site. Today, that can be extremely difficult to achieve, because the Internet has become a crowded place. No matter what the topic of your site is, there are probably thousands or hundreds of thousands of websites out there already on the same topic. Search engines like Google will index your site and then pretty much forget it exists. You'll get only a dribble of traffic and few if any sales. Much work and effort, little reward.
HOW A FEW PEOPLE HAVE BEAT THE ODDS
Amazingly, despite the steep odds, some people have actually found ways to earn significant incomes from online affiliate programs.
One way has been pay-per-click advertising. Google Adwords is a prime example, though similar ad-serving systems are available through Yahoo and MSN. In pay-per-click advertising, you buy ads on search engine results pages - these ads are called "sponsored results" or something similar. You pay a set amount each time someone clicks on the ad - usually anywhere from $0.25 to a dollar.
Now, that can get expensive. If you are paying fifty cents for one click to your ad, that brings you one visitor to your website, who may or may not click on any of your affiliate ads. A hundred such clicks and Google has charged you $50 and you may have no sales or commissions.
However, believe it or not, some people have made this work. One way is by only targeting very narrow niches. Not "Canon Cameras" but "Canon Powershot Cameras," for example, or even better "Cannon Powershot DSC 600."
Whereas a broad keyword phrase like "Canon Cameras," or worse still, "cameras," might have thousands of people bidding on it, a narrow one like "Canon Powershot DSC 600" might only have a few - namely, people promoting that particular type of camera. Thus the "per click" cost might be much lower -- and the "conversion rate" (the percentage of clicks converting to sales) much higher.
Hence by finding niches and by bidding on many keyword phrases, some people have done very well and continue to do so.
Another trick is "search marketing." Search marketing means to place pay-per-click ads on search engine pages (i.e., "search results" pages). When somebody clicks on these ads they're taken directly to the company's website, not to yours.
So, in the example above, you might put up an ad which takes the visitor directly to the Canon web page where he/she can immediately order the Canon Powershot DSC 600 camera, rather than forcing them to first go to your web site, then click a second time to get to the Canon order page.
Search marketing is a good idea but beset with ferocious competition. A few people who are very good at writing ads and very focused and determined can make it work - it's been done. But most will just run up Google Adwords bills. If you'd like to look into this further, I suggest a book called Affiliate Millions by Anthony Borelli and Greg Holden (John Wiley & Sons - see "Recommended Reading," below). It tells you everything you need to know to have a chance of becoming a successful search marketer.
GOOGLE ADSENSE
So dedicating yourself entirely to online affiliate programs is a big gamble. However, there's a way to become an affiliate marketer as a profitable sideline, and that's Google Adsense. Suppose you have a content website on skydiving and it gets a fair amount of traffic. Then you can sign up for Google Adsense and Google will provide you with a snippet of HTML to place on all your pages which will serve targeted ads related to skydiving - for example, parachutes, small plane flying instruction schools, etc. Whenever anyone clicks on one of these ads, Google credits your account with a commission.
Adsense is a good deal because you don't have to worry about choosing affiliate programs, bidding on keywords, or paying credit card bills for ads. Adsense chooses which ads to run on your site based on your content. Of course, if nobody clicks on any of your Adsense ads, you receive no commissions but then you pay no credit card bills either.
According to a recent article in USA TODAY, headlined "Google Search Ads Find Momentum," some people are cleaning up with Adsense. One website owner, Marc Ostrofsky, is quoted as saying, "I put up a website, add the Google ads, and wait for the money to start flying in."
That seems a little extreme. Nobody puts up a website and gets money flying in - you have to generate traffic first. What's more, Ostrofsky owns a company, iREIT.com, that manages thousands of sites, some high-traffic. For most of us, returns from Adsense will be modest but nevertheless welcome. As you may have noticed, WebSearchGuides runs some Adsense ads.
A FINAL WORD
"Online affiliate programs" is one of the most in-demand keyword phrases on the Internet. Every day, many thousands of people research this subject, hoping to find a way to supplement their incomes with a home-based business or, better yet, make a million and forget about holding a regular job.
As a result, there's a thriving "guru" industry out there eager and willing to teach you how to become an affiliate marketer, but the question is, If there is so much wealth to be made marketing products on the Web, how come the gurus aren't doing it themselves instead of teaching others how to do it?"
That's it - our ten minutes are up! (OK, maybe twelve or thirteen.) Below is a listing of Web resources to help you continue your research on online affiliate programs.
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II. For Additional Research
This Section provides reviews and recommendations of Web sites and other
online resources
Search Marketing
Google Adwords, Yahoo Marketing, and MSN are the top-tier search marketing services, but competition is ferocious and keywords expensive on these services. Therefore, some search marketers have been turning to second-tier search engine services where prices are more reasonable and costs less. In these services you can sometimes pay a nickle or less for a keyword that costs twenty to thirty times as much on Google Adwords, yet the traffic is just as targeted. You will get less traffic, but at much less cost. Two of the best second-tier services are Enhance and 123Search. Enhance might be a good choice for a beginner for one simple reason: it's the most user-friendly and has the industry's best customer service. Each customer gets a telephone number and access to an account rep who will promptly answer your questions. 123Search is a smaller company known for its extremely low keyword prices, as low as three cents per click. Of course, with both companies, you will get considerably less traffic than from a top-tier service, but your chances of making a profit may be better.
Recommended Reading
III.Discussion
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