The Story Regarding Affiliate Networks

 

An affiliate network is basically an intermediate amongst publishers and merchant affiliate programs. Affiliate networks assist publishers or affiliates as they are typically known, to easily find out the affiliate programs that will generate more traffic and hence more revenue for their web sites. It also allows the online merchants to advertise their affiliate programs to all publishers who are taking part in the affiliate networks. It is an equally helpful scheme for publishers and online merchants to gather at one place and reap in the benefits.

Affiliate networks are based on the idea of revenue sharing that is, they let merchants offer a part of revenue produced to him from traffic to the publisher's web site. There might be a fee for each visitor on the site that undertakes and completes a particular action like making a purchase, or for registering and subscribing for a newsletter or a magazine. But usually revenue sharing is the common method compared to or contrary to a fee-per-action model. Affiliate networks with many advertisers also draw in a large group of the publishers. Big affiliate networks generally do not need to recruit publishers as the publishers already flock to them on their own. Typically websites that attract the same kind of customers as the advertisers but without any competition in them are common affiliate network associates.

Affiliate networks have grown very quickly since their inception. Seen as marketing toys in early days of internet, they have become an important part of business plans of many organizations around the world. In reality they have been so profitable that they have grown into larger businesses than the present offline business. The total sales amount generated according to one source by affiliate networks is £2.16 billion in UK alone for the year 2006. In the same year for the USA the overall bounty amounted close to US $ 6.5 billion.

Affiliate networks are mostly used in assortment of sources like retail, gaming as well as gambling, personal finance, travel, education, telecom and also publishing. Traditionally the affiliates are allowed to join the network free of cost while there is generally a minimal fee for the merchants to participate. The network also charges the first setup or a membership fee which are recurring. Even though affiliates join free of charge, but they pay a certain percentage of their earnings as commission to affiliate network.

Affiliate networks are a large conglomeration of publishers and suppliers working towards a common goal; profit realization. Merchants bring in benefits like tracking technology, payment processing, reporting tools as well as a large group of publishers out of the affiliate network. On the other hand, affiliates derive services and benefits like affiliate programs, reporting tools and payment aggregation by using the network.

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