Affiliate Marketing Using Your Website

The Basics

In addition to PPC advertising, many websites choose to start affiliate programs. In an affiliate programs, you encourage other webmaster to sign up and advertise your services and products on their sites, in exchange for you paying them based on their performance. There are various way that affiliates can be paid:

• Per Impression: The affiliate is paid a set amount for every time that your ad is shown. This is commonly measured as CPM, which is the cost for 1,000 impressions (an impression is a single display of your ad). The downside is that affiliates have no incentive to send you traffic, or to put your ad in a conspicuous location.
• Per Click: You pay a set amount for each unique person that clicks on your ad. This is similar to a PPC engine. The downside is that you must pay even if the traffic is of a low quality.
• Per Lead: You pay your affiliates based on the number of unique people that click on your ad, and then proceed to complete a particular action (for example, a "lead" might be when someone downloads a trial, or signs up for a mailing list). This is very similar to Per Sale, but is more common on sites promoting free services.
• Per Sale: The affiliates are paid either a percentage or a set amount for each sale generated by a users that originated from the affiliate's site.

Affiliates usually prefer receiving commissions on a Per Impression or Per Click basis, but site owners prefer the predictability of Per Lead and Per Sale.

There are three ways to start an affiliate program: roll your own, install a script, or use a third-party service.

Rolling Your Own

If your website's order system has been custom-made, then one option may be to ask your programmer to add an affiliate program to the system. The programmer would add some code to the payment script, and then develop a simple interface for affiliates to see how they're doing, and for you to check on your affiliates.

This is an economical option for sites based on custom scripting, but site owners may be weary to trust your reporting (after all, it would be in your best interest to fudge the numbers). Established sites can get away with this, but new websites may have difficulty here. Also, if you roll your own then it will be entirely up to you to promote it.

Installing a Script

If you don't have a custom-built order script, or if the necessary modifications would be too expensive, then a similar option would be to install a ready-made script. The CGI Resource Index has a list of such scripts. HotScripts has a good list of PHP affiliate scripts. Free scripts are out there, but are generally difficult to find if you're interested in the script's quality (which is important for an affiliate program). Expect to pay $20 to $60 for a good affiliate script. A few scripts are highlighted below:

• First Affiliate (free) - One of the few free scripts, but it has extremely limited functionality.
• Click Affiliate ($35) - Not the best, though the interface is reasonably functional.
• YourAffiliates ($59) - Provides myriad features, and the price is mid-range.

These aren't necessarily the best, they're just to demonstrate the variety of scripts available.

Like rolling your own, this presents the problem of finding affiliates. Also, affiliates may be just as suspicious of using a script controlled by you as they would be of a custom-built affiliate system.

Note: If you use Miva Merchant 4.x or higher, then you already have a simple built-in affiliate program that's worth taking a look at. See the documentation for more information. Other shopping cart systems may have a similar feature.

Using a Third-Party Service

The final option, and the one chosen by the largest number of sites, is to use a third-party service. Here, you let another company control your affiliate program. They will take care of managing it, and to some extent finding affiliates, but at a price. You must agree to give the company a cut of all commissions, and in most cases make substantial deposits.

Several programs at different sides of the pricing spectrum are examined below.

Low-Cost: ClixGalore
http://www.clixgalore.com/pricing.asp

Costs: 25% of the amount paid to affiliates. $75 minimum deposit.

ClixGalore has one of the lowest required deposits, and no fees. This makes it an attractive option for low budgets, but you could easily become buried in the thousands of affiliate programs. Expect to promote your program entirely by yourself (unless you pay for a higher option).

Low-Cost: LeadHound
http://www.leadhound.com/

Costs: A $149 setup fee, and a $200 deposit. They then charge 30% of what you pay your affiliates.

They have good support and a good user interface. Although they usually end up second to ClixGalore, LeadHound is definitely still worth a look.

High-Cost: Commission Junction
http://www.cj.com/

Costs: Currently a $2,250 initial fee and a $250 yearly fee. In addition your are required to make a $3,000 deposit from which your affiliates are paid, and you must have at least $500 in transaction fees per month. The transaction fees are 30% or 30 cents, whichever is greater.

Commission Junction has by far the most affiliates and the best service, but you pay big for it.

Highest-Cost: LinkShare
http://www.linkshare.com/

Costs: If you have to ask, you can't afford it. The lowest service level runs at about $10,000 for the first year and $2,000 annually thereafter, in addition to the transaction fees.

LinkShare is up there with Commission Junction, and has an excellent product in every way. But unless you have deep corporate pockets, they're not for you.

Conclusion

An affiliate program is an excellent way to gain additional sales. There are options for all budgets, but you generally get what you pay for.

Good luck!