Let’s say you’re reading The Big City Book Review online. You’ve decided to read the review of, oh, the new annotated edition of Incredibly Famous, Historically Significant Book. Of course, the name of the book is listed above the review, and is typed in a highlighted font–clearly a link to more information on said tome. You click on that link, and suddenly you’re at the Gigantic Online Bookseller site. Congratulations. You have just witnessed affiliate marketing in action.
Ecommerce authorities refer to affiliate marketing as a “win/win” for both involved parties– in this case the “Affiliate Advertiser/Merchant” (Gigantic Online Bookseller), and the “Affiliate Publisher/Salesperson” (Big City Book Reviewer). It’s a win/win situation because neither entity paid for the privilege of being linked to the other’s website. However, based on your actions, Gentle Reader, the GOB may send a little cash “thank you” to the BCBR just for clicking on that link (called “pay per click”); and they will certainly pay if you actually followed through and purchased that, or any other, book during your visit (called “pay per sale”).
How do both parties keep track of what could easily amount to thousands of clicks and sales in a day? First off, “tracking” is generally considered to be the responsibility of the Advertiser/Merchant. The Advertiser/Merchant can handle this obligation in one of two ways. The first is to outsource the work to a third-party company which specializes in “affiliate tracking.” These third-party companies provide a wide range of services, and usually at a pretty steep price. Of course, if you’re an enormous online book-selling institution, with affiliates numbering in the hundreds of thousands, you need that kind of service–and can afford to pay for it.
However, Advertiser/Merchants which operate on a smaller scale often select Affiliate Software. Basic affiliate software tracks sales performance for up to 200 individual affiliates, and provides templates and other tools for banner ads, links, e-mail and site management. Most vendors of affiliate software also provide customer assistance in terms of set-up and trouble shooting. Customized functions are also available, as are upgrades when your business demands them.