Internet affiliate marketing is essentially the online version of paying for referrals. It is a method of promoting online businesses by rewarding an affiliate for every customer, subscriber, or visitor provided through an internet marketing affiliate program.

Affiliate internet marketing is especially attractive for merchants, because it is a pay-per-performance advertising model, and puts the bulk of the responsibility for generating leads onto the affiliate, rather than the parent company. Most affiliate marketing networks offer compensation in one of three ways:
• Pay per click – where the affiliate gets compensated for every visitor
• Pay per action – where the affiliate gets compensated for ever registration
• Commission – where the affiliate earns a small percentage of each sale.
Some internet marketing affiliate programs combine two or all of these compensation methods.

Getting Involved with Affiliate Marketing
There are two ways to get involved with internet affiliate marketing: you can either become someone else’s affiliate, or you can set up your own internet marketing affiliate program.

Become an Affiliate
It is extremely easy to become an affiliate. Just visit the website for an affiliate marketing network, and complete their online application, which will ask for person information, like your real name, address, and payment details, and some information about your site, like the URL, name, and a brief description of the theme and content.

Once the affiliate network approves your application, you can begin selecting specific programs that are of interest to you. Most of these programs are free to the affiliate (you), so there’s no real need to even look at the programs that charge. After you’ve made your selections, the merchants represented by the programs you’ve chosen will review your information. They may visit your website, or they may just read whatever information you provided on your application. Either way, if they approve you, you’ll be expected to sign some kind of “terms of service” agreement, and instructed to include a specific sort of link to them somewhere on your website.

Payment arrangements differ from program to program, but because individual earnings tend to be relatively small, it is standard for merchants to send out payments only when a specific dollar-threshold has been reached.

Set Up an Affiliate Network
Alternatively, you may choose to set up an affiliate internet marketing program of your own, which is more expensive and more complicated, but also potentially more lucrative. To do this, you would have to recruit and screen all affiliates yourself, set up and maintain a system to track affiliate sales, design and approve the linking technology you want your affiliates to use, and make sure your affiliates know how to incorporate the required code into their websites. In addition, you may have to install a separate phone line, just to answer affiliates’ questions, and you will still have to set commissions, and implement an accounting system.

Once you determine your needs, you will need to track the following things:
• The number of people who click your link on an affiliate’s site
• The number of people who purchase your goods or services, after being sent to your site by an affiliate.
• The number of people who buy nothing, but still provide contact information.
• The number of people who simply see your link on an affiliate’s site.

There are many software programs to help you track information, and they range in price from $100 – $500, which is less expensive that signing up with an affiliating marketing network as a merchant. Additionally, there are tracking companies that will track the required factors for about the same cost as the software, but a bit more expertise, although you would still have to do everything else yourself.

Of course, you still have to determine your commission rate, and then decide on your commission scheme. The two most commonly used commission schemes are the Tiered Commission, and the Residual scheme.
• Tiered Programs are structured in a similar fashion to popular multi-level marketing organizations, like Amway, and is sometimes referred to as “network marketing.” Affiliates receive commissions based on leads, clicks, or sales from their own site, and also receive commission based on the productivity of affiliates they recruit – known as their “downline.”
• Residual payment is generally used when merchants expect a continuing relationship with a customer, for subscription services, most often, but anything where this is a regular periodic fee. In this commission scheme, affiliates keep making money, as long as the customer maintains their relationship with the merchant.

Acquiring Internet Marketing Affiliates
Once you’ve made the decision to get involved with internet affiliate marketing, you need to find affiliates. While it is possible to recruit and screen your own, this is extremely time-consuming and inefficient. Your best bet is to join an affiliate marketing network, which will help you set up your internet marketing affiliate program and work to find affiliates for you.

Just as when you apply to be an affiliate, you will have to complete an application, providing personal information, as well as information about your website and your business. You may also have to make several deposits, including a one-time fee for joining the network, and a lump sum used to pay your affiliates. In addition, some networks require a yearly fee for their continued services. To join a major network, this could easily total $1,500-$5,000, and you will also have to pay the network a percentage of each commission you pay to an affiliate.

In exchange, however, the affiliate marketing network will help you set up, track all your activity, and even issue checks to your affiliates on your behalf. They will also disseminate your link to appropriate affiliates, and give you the option to review prospective affiliates, or have them approved automatically.

Promotion Technology
Once your network is set up your affiliates will need to link to your website. There are several ways to set up these links. Here are the three most common:

• Banner Links appear as boxes containing graphics and text, and are likely to be the best choice when a text link may not be a strong enough attraction.
• Search Boxes allow users to search a database on another site, and provide linked results.
• Text Links are useful because they can be blended into website content, which makes them look less like advertising. This can be extremely beneficial.

Affiliate marketing networks use these links in many ways, to help match customers with products in the most effective way. Here are some popular uses:

• Co-Branding allows affiliates to maintain their own web identities even after a user has followed the link to the merchant’s site. The merchant will handle all transactions, and might even host the pages, but it will mask its own address, and configure the pages to match the affiliates’ designs. Unless the user is extremely net-savvy, they are unlikely to know they have left the original site.

• Direct Links to the merchant’s home page are a straight-forward method of introducing users to the merchant.

• Product specific links allow an affiliate to sell or promote only one product at a time by linking to the merchant’s page for that specific product. It’s frequently used by Amazon.com affiliates, who link to specific books.

• Registration links allow users to save time by being sent directly to a merchant’s registration page. This is especially useful for merchants and pay-sites which require users to be registered before they can use (or buy from) the site.

• Storefronts allow affiliates to introduce their visitors to a variety of products, by linking to pre-fabricated storefront websites. These sites are maintained by the merchant, and allow products to change without the URL being altered. Some merchants allow affiliates to customize their storefront pages to display only those products that are relevant.

Whether you choose to be only a merchant, or to join an internet marketing affiliate program, and whatever method of linking you ultimately choose, you will find that the best success comes when the website content and the affiliate merchant compliment each other. For example, a car related website should affiliate with a company that sells automotive products. This key to internet affiliate marketing helps breed success by linking customers with merchants who offer relevant products, and that means happy customers, and happy merchants.