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Pay-for-Performance Marketing – Paying For Results!
By Lori Wilkerson
In our earlier article,
“What
is an Affiliate Program?” we defined how affiliate marketing worked. Others
refer to this concept as pay-for-performance marketing because commissions are
paid only when there are proven results, whether those results are
click-throughs to a website that provides qualified leads or an actual sale.
The growth of performance-based marketing is virtually
guaranteed on the Internet for a number of reasons, including
flexibility and ease of set-up. In fact, by 2003 the revenue
generated through this type of marketing reached $95 billion. By
2008, industry experts estimate that pay-for-performance markets
will gross well over $230 billion. It’s an impressive figure by
anyone’s standards, and one reason for the success of third
party management companies in the affiliate marketplace.
The success of pay-for-performance relies on the publisher (the
website that is promoting the product or service for the
advertiser) offering a variety of options and generating enough
traffic to provide volume referrals. This can be done by:
-
Generating
plenty of interest by effectively marketing the product
-
Providing
useful information in order to keep visitors on the website
-
Motivating
click-throughs that turn into valid leads
-
Motivating
click-throughs that turn into actual sales
-
Making sure
the site has a solid place in the search engine rankings
-
Providing forums on topics of interest
-
Having interactive areas for visitors
-
Being selective – niche websites may have fewer advertiser
offerings, but tend to have higher conversion rates on what
they market
How To Choose the Right
Performance-Based Program For You
There are several types of pay-for-performance programs that
individuals can use, and which they choose is largely a matter
of the type of product being promoted and the kind of website
they will be building (or already have).
Many people just beginning in affiliate programs jump on the
concept of “pay per click” because it seems easier. Every time
someone clicks on a link, they earn a commission. However, the
commissions for these are a great deal lower so the earnings
won’t necessarily be great early on. A few cents a click will
take a while to add up, but if you have a “pay per purchase”
rate of $10 per sale and ten people buy something your first
month, you’ve made $100.
There are details to research in any performance-based Internet
program, and you should do your homework. Ask some good, solid
questions, including:
-
How often
are commissions paid?
-
How are
commissions tracked?
-
Do I
receive a record of my site’s performance?
-
Do you have
a minimum performance requirement before commissions are
paid?
-
Do you have
a dispute resolution policy in place?
-
What kind
of support do you offer your pay-for-performance members?
With performance-based commissions anticipated to increase their
presence in the Internet sales marketplace by 250% by 2008, it’s
obvious that this marketing model is highly successful. If it
wasn’t successfully driving sales and increasing profits for
both the advertisers and the affiliates, the numbers wouldn’t be
increasing.
Amazon is the prototype of success in the arena with this model
– they now have over 600,000 affiliates and are still adding
more. In fact, retail and gambling are two performance-based
markets that earn a substantial portion of their revenue from
click-throughs that are driven by affiliates.
The growth of the pay-for-performance industry is assured by the
success of the system, and with the Internet constantly evolving
with ever-increasing niche markets to be found, there’s
something for everyone.
About The
Author
Lori Wilkerson
is a full-time freelance writer who loves her work because it
gives her the opportunity to learn more about the world every
day. Right now, she knows a little bit about almost everything,
and a lot
about
working from home in a homebased business on her PC.
She has two dogs who are spoiled and one teenager who is not.
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