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How An Affiliate Network Works

An affiliate network is like a middle-man. It acts as the go between the online merchant and an online publisher. It provides an easier way for the online merchant to find the right online publisher where he can display his advertisement. The affiliate network is also the one that helps the merchant track the performance of his ad and use the information to optimize his program to better suit the demand and the need.

The concept of affiliate network was popularized by Jeff Bezos, the CEO and founder of Amazon.com. From his concept the affiliate network was born.

The work of the affiliate network is to track the activities going on the website, arrange the payments, and if the need arises, set up links on the affiliates' website. Another work of the affiliate network is to compile a directory of affiliates. Affiliates also serve as a help desk for both the online merchant and the online publisher.

Online merchants have the option to look for publishers but it is easier for them to look for the right niche they want to capture if they get the service of an affiliate network. An affiliate makes it easy for the online merchant to find the right publisher for their product.

The affiliates get their revenues from the cut they make from each transaction. A usual commission is at 20 percent but this could vary depending on the agreement entered upon by all parties involved.

There are three forms of agreements that can be entered upon by the merchant and the network - the pay-per-sale, pay-per-click and the pay-per-lead. Each scheme also has different payment styles. For the pay-per-sale, the merchant pays the affiliate when the customer that enters their site purchases something. It pays the affiliate a commission from the sales made. An example of this is Amazon.com's affiliate program.

The pay-per-click on the other hand, based the payment for the affiliate on the number of clicks on the link that leads to the merchant's website. It does not matter if the visitor buys something or not because what matters is the number of visitors that enters the site.

Pay-per-lead on the other hand is a payment scheme based on the number of visitors that goes to the site and signs up the forms they have. These forms are called leads. It gathers information such as email or some sort of survey. The merchant uses these information as a sales lead.

The popularity of e-commerce is the reason why there are a lot of affiliate networks that have sprouted. There are even networks that hired employees to help them generate more clicks and thus earn more.

Overall, affiliate networks have reshaped the way marketing is done online. It has made target advertising easier. Affiliate networks have made the identification of the specific target market easier as well as reaching out to them.

I am a Internet Marketer and I have been at the beginning when nothing made sense. So I wanted to help you with as much information as I can. I hope you will find some use for what you find here, if you would like more resources I invite you to take a look at http://www.milinda-mariefreesite.com or http://www.milinda-marie.com/blog

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