affiliate-marketing-infographic-01Below, you will find an unedited excerpt from my new book about building Internet-based businesses, Online Business from Scratch. To receive updates about the book, visit www.fromscratchbook.com.

Affiliate marketing is a type of online advertising that pays publishers and marketers a flat fee or a percentage of a sale when a user takes a specific action after clicking on one of your ads. For example, you might review a product on your website and include an affiliate link to Amazon so that readers can purchase that product should they so choose. If one of your readers clicks on your affiliate link and buys that product from Amazon, you will receive a percentage of the revenue that Amazon makes from the sale. If you ran a financial website like I do, you might promote a product like TurboTax, which runs their affiliate program through CJ Affiliate. If I place a banner ad on my website or send an email to my mailing list about TurboTax and someone purchases a license to the software, I would receive a flat fee commission for generating the sale.

Affiliate Ads Vs Display Ads

When you run display ads on your website, the advertiser takes primary responsibility for the success of their ad placements because they are paying for each click or each impression regardless of whether or not the user buys anything. When you promote products through an advertiser’s affiliate program, you only get paid when a member of your audience clicks through on an ad and buys something, which creates a shared responsibility for success between you and the advertiser. You might wonder why you would ever promote an affiliate program if more of the burden to generate results is on your side, but affiliate ads can be very lucrative if you find an affiliate program that is a good fit for your business.

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Affiliate ads tend to be much more flexible than display ads in terms of where you place them. You generally can’t include display ads in any messages that you send to your email list, but you can include banners and links to promote affiliate programs. You have the flexibility to include affiliate links naturally in your content like you would any other hyperlink. If you are going to link to a product anyway, you should just as well get an affiliate commission if someone ends up buying that product. Of course, you also have the ability to promote affiliate programs through traditional banner ads like you would with a display advertising network.

Affiliate Networks and Standalone Programs

Affiliate programs can either be run independently through the advertiser’s own website or through a network like CJ Affiliate or ShareASale. As a publisher, it won’t matter too much how whether or not a program is run independently. The only difference will be which website you login to get ad copy and potentially how you receive payments from the advertiser. Generally speaking, affiliate programs that run through a network are viewed as being more reputable than standalone programs. However, if you are promoting a well-known advertiser, you shouldn’t have any problems getting paid if they’re running their affiliate program independently.

In order to find affiliate programs for you to promote, your best bet is to start by creating accounts with some of the larger affiliate networks and using their internal search tools to find advertisers with active affiliate programs. For example, with CJ Affiliate you can use their search tool to find advertisers with affiliate programs in specific categories and affiliate programs that cater to specific geographic areas. You can also see how much current publishers are earning on average for each program, which will help you identify what programs may be the most lucrative to promote.

Here are some of the larger affiliate networks and programs:

Rules of the Road for Affiliate Marketing

If you are participating in an affiliate marketing program, be aware that there are certain FTC rules that require you to disclose if you are getting paid to endorse a product or if you are linking to a product or a service through an affiliate link. You can read the FTC’s full guidelines for how to properly disclose affiliate links at http://bit.ly/ftcaffiliate, but the general rule of thumb is that consumers should be able to notice your affiliate relationship disclosure easily. You might do something as simple as putting the words (Sponsored Link) next to any affiliate links to avoid running afoul of the FTC.

Beyond the legal requirements of promoting affiliate programs, there are a few other best practices that you should follow when promoting affiliate programs. First, always be transparent that you are getting paid to promote a product or service. Nothing will taint your credibility with your readers more than promoting something you are getting paid for and not telling them about it. Second, only promote products and services that you and endorse and would use personally. Never promote products that you wouldn’t use personally or encourage a close friend to use, because it’s not hard for readers to figure out that you are only writing about a product or service because you are getting paid to do so. Finally, don’t let your relationship with an advertiser effect your content. You will gain more credibility with your readers by writing about both the pros and cons of any product you are promoting than you will by only writing about the positive aspects of a product.

How to Promote Affiliate Programs

There are several ways that you can direct your audience to an affiliate advertiser’s ads:

  • Product Reviews – Write a review of the advertiser’s product or service and put it on your website. Write about what the product or service does, along with its features and benefits. Write about your personal experience with the product or service and any downsides to gain additional credibility with your audience. At the end of your review, include a link to buy the product or service using your affiliate link.
  • Place Affiliate Links in Articles – Whenever you mention a product or service in an article, consider including an affiliate link to buy that product. For example, whenever I mention a book on my personal website, I will include an affiliate link to buy that book on Amazon. By including these links, my readers are able to easily purchase a copy of the book I recommended and I will earn a small commission for the sale that was generated from my website. The 80-20 rule applies to this strategy. Don’t bother signing up for a bunch of affiliate programs to get commissions for products that you write about once. Sign-up for broad programs like Amazon Associates that allow you to link to thousands or products and sign-up for products and services that you will mention over and over again on your site.
  • Promote Products Through Email – You can include an email in your auto-responder series that promotes a specific affiliate program. The email should be a mix of an endorsement and a review that describes what the product or service does and why you use it. At the end of the email, include an affiliate link where your readers can buy the product or service.
  • Place Banner Ads on Your Website – Just like with display ad networks, most affiliate programs will make banner ads that promote their products and services that you can use on your website. If you are considering giving an affiliate banner ad a prominent placement on your website, make sure to test it against running a traditional display ad. Typically, an affiliate banner ad will not perform as well as Google AdSense or another network unless the offer is extremely relevant to your audience.