Chapter 2. The Benefits of Affiliate Marketing
Chapter Summary |
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Talking sock puppets, imploring piggy banks, hamsters shot from cannons—are these any way to drive traffic to your eBusiness? Dot-com advertisers in the last few Super Bowls thought so—some of whom are paying the ultimate price of such ads by draining their corporate coffers of much-needed operating capital. With customer acquisition costs running at unsustainable levels, tomorrow’s eBusinesses must find more cost-effective ways to attract customers to their sites. One way to get a better ROI (return on investment) is to use affiliate marketing. Setting up a successful affiliate program can increase your shelf space, company visibility, and help you sell more products or services. Analysts also agree that affiliates are an important customer-retention tool for all segments of online commerce. The types of products and services marketed through affiliates are nearly limitless and range far afield. Affiliate marketing succeeds when your company has a relationship with affiliate sites. Both you and your affiliates have a stake in making your offers sell, and with an affiliate program your marketing dollar is measurable, controllable, and returns a higher return on your investment than almost any other marketing vehicle on the Net today. Those companies that do not have an affiliate program right now are making an active mistake on a daily basis. |
The total number of Web pages on the Net is rapidly approaching one billion. Many e-commerce companies have found that it takes a hefty marketing budget to be heard above this din. But cute million-dollar TV ads, multi-million–dollar flat-fee portal deals, and expensive banner buys that raise the cost of customer acquisition beyond what it costs in the real world have reduced the coffers of many e-commerce companies. All this is forcing many online companies to look for ways to reduce their marketing outlays and achieve a better ROI on the advertising they do place.
What Is ROI?
| ROI stands for Return on Investment. This is what all marketing managers want to see from the money they spend on their marketing and advertising campaigns. The higher the sales, the larger the number of shoppers, and the greater the profit margin generated by sales—the better the ROI. |
One way to achieve a better ROI is to use affiliate marketing to increase sales, drive traffic, generate qualified leads, and extend brand reach through relationships with affiliate Web sites. Companies can then target consumers with particular interests, knowledge, and spending habits, while paying only for the performance of their promotions.
The result is lower customer acquisition costs. If that is what your company is looking for—and what company isn’t—then affiliate marketing is for you.