by Ginger Marin

Affiliate Marketing, also called Performance Marketing, is one way to add passive income to your website if you’re a publisher. And, if you’re a merchant, it can be an effective customer acquisition tool. This is not the same as pay-per-click, but rather, it’s a pay-per-transaction program.

Advertisers
An advertiser, also known as a merchant or retailer, is a web site or company that sells a product or service online, accepts payments and fulfills orders. Advertisers partner with publishers to help promote their products and services. Publishers place advertisers’ ads, text links, or product links on their websites or include them in e-mail campaigns and search listings in exchange for commissions on leads or sales. As an online merchant, you decide the commission structure to pay and only pay when results come in. That means, you pay only when a sale has been made, or a lead provided if that’s what you’re offering.

When you join an affiliate marketing company, you will have to establish an account and make a deposit to cover potential sales. The amount of this deposit varies by marketing company, which tracks the sales and commissions earned by your affiliates. They will consolidate the commissions and pay the affiliate for you out of money in your account, which you must replenish as payments are made.

In all cases, you have a say in which affiliate you will approve or deny, based on your own criteria, such as for websites of a certain caliber, category of website, etc. Or you may prefer to have automatic sign-ups, taking anyone interested in your product or service. It’s up to you.

Publishers
A publisher, also known as an affiliate or reseller, is an independent party that promotes products and services of an advertiser in exchange for a commission on leads or sales. A publisher displays an advertiser’s ads, text links, or product links on their Web site, in e-mail campaigns, or in search listings. The publisher is paid a commission by the respective advertiser when a visitor takes a specific action such as filling out a form, subscribing to a service (lead examples) or making a purchase (a sale).

Upon registering with an affiliate marketing company, you decide which merchants to promote and how to promote them. Some advertisers will readily accept you; others may not. It depends upon the preferences of the merchant.

In your account, you’ll be able to view stats, showing when commissions are generated or even if someone has clicked on your ad and you usually have the choice of posting a text link or banner ad. You can also see your stats in real-time. Commissions are consolidated from the programs you participate in, and you are paid with one check or direct deposit when you reach a certain payment level, as outlined by the marketing company. You can join and quit programs based on how well they perform on your site.

Affiliate Marketing Companies

Here are three top affiliate marketing companies. There are many more out there for you to consider. Be aware, though, many don’t generally allow you to view a list of merchants or publishers before you actually sign up for an account.

Shareasale.com: This is a very easy to use program that’s fair to the publisher with generally fast stats updating. It has a decent and varied list of merchants from which publishers may choose. It is less expensive for merchants to start an account than using Commission Junction.

Commission Junction – cj.com: This is a very well known affiliate marketing company with a number of integrated programs for Merchants. Some higher end merchants can be found here. It is, however, less friendly to publishers who can lose their entire commissions to “fees” or have their accounts suspended and/or deleted if actual sales aren’t generated within a set amount of time, even though a publisher has generated thousands of clicks and potential clients for an advertiser.

Linkshare.com: This company more recently changed its back-end stats area and it was not as easy to use as Shareasale. However, you can find some good merchants here. It offers merchants varying levels of service.

If you’re a merchant, you’ll simply have to weigh the costs of the various programs to see what works best for you. For publishers you should look for ease of use, commissions paid, types of advertisers available to you.