Affiliate marketing

Affiliate marketing is about making agreements with other websites to promote your goods and services - or vice-versa. Having an affiliate promote you can increase traffic to your site and help you make more sales.

Being an affiliate and promoting someone else's site means you can generate cash by increasing their traffic and helping them to meet their sales or marketing goals. Whether you employ affiliates or become one yourself, affiliate marketing can be very lucrative, if you get the right partners.

Affiliate marketing or online advertising?

Affiliate marketing may look very similar to online advertising - and affiliates often carry advertisements for the business they are promoting. But it differs from advertising in two ways.

First, you pay affiliates for actions rather than advertisements. For example, you'll pay them for every customer who actually buys something from you or signs up to your e-newsletter, or whatever your marketing goal happens to be.

Second, your relationship with your affiliates will be much closer than that of an advertiser and a publisher. Affiliate marketing depends on you and your affiliates working together to boost your sales. You're likely to find yourself giving marketing advice and support, for example.

The idea is that you build a distribution network rather than just place ads. Setting up an effective affiliate program will take investment in systems and relationship building. But once it's up and running, you should have a team of motivated affiliates promoting your company and you will only pay for results.

Setting up an affiliate program

If you are planning an affiliate marketing program, your business must be attractive to affiliates. Ideally, an affiliate will want a sales partner with potential: someone serving a large market with a well-designed online shop, for example. Affiliates will also want to see that you have a good profile and active marketing to support sales.

You'll need to consider how affiliate marketing works with your other marketing activities. For example, if your affiliates want to use search engine marketing to promote you, will you find yourself competing with them in search engine rankings?

Other things to think about will include incentives, tracking website traffic from affiliates and working out contracts.

Becoming an affiliate

If you want to become an affiliate yourself, you'll want to promote a business with good sales potential, effective affiliate marketing support and competitive rewards. You'll also have to be prepared to show that you have something to offer them in return.

A starting place could be to think about the other products and services that your customers might be interested in. Many sites act as affiliates for Amazon, for example, by selling books relating to their own industry. A more proactive approach can involve developing new content or using search marketing specifically to attract potential customers for another business' products to your website.

A quick Internet search can help you identify firms that offer affiliate marketing programs and affiliate networks you might join.