Affiliate Marketing literally translated it means: affiliate marketing.
Affiliate Marketing - what it is and how it works.
This type of market is active worldwide and is a trade that can only be done online,
There are two main figures in this type of sector. The Merchant (Merchant) and the Publisher (the Affiliate). But what happens in detail?
The merchant has the availability to sell products online through his site. The Publisher will try to convey as much traffic as possible to the sales page of that particular product. For each sale, the publisher will receive a commission from the Merchant.
Traffic can be brought to the sales page using the previously agreed traffic channels, for a fee or through SEO or Email Marketing (DEM) activities, in order to generate conversions.
A conversion can be defined differently depending on the program or campaign to which the affiliate adheres. Information about this is always set out in the advertiser's commission plan and is often referred to as CPA or cost per action.
For example, an action can be a click, a sale, the purchase of contact data, the download of a catalog, and so on.
Let's take a concrete example:
- The merchant sells a razor on his site
- The selling cost is 45 euros
- The merchant pays the affiliate 18 euros for each razor he sells through his advertising
- The affiliate decides to do paid advertising on Google
- Such advertising has calculated that it will cost him 50 cents per click
- Every time someone on Google clicks on the ad they send to the razor sales site page, the affiliate will pay google 50 cents.
- The affiliate will earn 18 euros every time one of those who previously clicked on the ad in Google makes the purchase.
Having said that it is clear that the deal stands as long as the following formula works:
(No. of sales X 18 euros) - (No. of clicks made on the annincio X 50 cents)> 0
So if, to make 10 sales, I needed 300 clicks on the ad in google I will have:
(10 x 18) - (300 X 0,50) = 180-150 = 30> 0 - OK you can do it. It is the case of "climbing the campaign"
We have seen that in this case the tour brings us a profit and therefore we can think of investing more money on google to bring more traffic and have more income.
It is statistically probable that if I invested 150 euros to bring 300 people that generated 30 euros of income. Multiplying this by 100, I will have 100 times the initial profit.
Luca from The ForeRunners