Because performance-based advertising obviously won’t be paying off on as regular a basis (there isn’t the volume of return there is on CPM), the corresponding percentage of commission needs to be higher per sale or qualified lead. Why has this model grown so much in popularity? It’s simple – cash flow. Ten years ago, brand recognition was considered all-important, and most Internet merchants were salivating over the opportunity to plaster their logos and names on every site possible. They wanted their banners seen and their logos recognizable, assuming that this would translate into sales dollars, so they paid for every banner and click. It didn’t always work at that way, and they began looking for alternatives. The pay-for-performance model gained wide acceptance because, although the payout per sale was correspondingly higher, the merchant was paying for an actual, concrete result. It felt good, it felt right. Everyone was happy because the affiliate was still getting a commission on a quantifiable, measurable result, and the brand recognition could still be out there. Who’s to say how many people saw the banner but didn’t buy? Today about 33% of all online advertising is performance based, although the number is steadily increasing by a few percentage points each year. Beating the Heck Out of TV and Radio Advertisements on television or radio are being backed by some manufacturers. While the big chains still, and probably always will, use this tradition method of advertising their wares and promoting brand recognition, there are hundreds of companies who started out on the Internet who would no more spend their advertising dollars on a billboard or sixty second radio spot than they would give up their broadband. Why? Because radio, television and print ads all have one thing in common – they cost a primary outlay of cash with no visible means of measuring the return. Who needs that? But an affiliate pay-for-performance website? That’s different – no up-front payment, no expenses, and you only pay a commission when you’ve made money. It just doesn’t get any better than that! The Internet is also the engine of instant gratification. If someone sees a billboard while driving down the highway, she may forget a moment later how cool that new sneaker looked. It’s getting to be a difficult sale for many advertising agencies. How do you gauge whether a purchase was made because of a billboard, a jingle on the radio or an advertisement on television? But seated at her computer, all this same girl has to do is click the link to buy those fabulous sneakers when she sees them, and they are hers. Even better, the merchant will know exactly where she saw them and when. The final beauty of this for companies is that there cost is only the commission – home based businesses abound that are affiliate marketing sites. These publishers take care of the details of linking and promoting the products or (in some cases) use a third party that puts merchants and publishers together. For merchants, it reduces the advertising budget drastically while continuing to drive sales to their website. It’s passive for them, active for the publisher. Quick, cost-effective and easy. Nothing will grow faster in the future than performance-based marketing. Related Items
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
starting a
work at home business using a computer.
Lori has two dogs who are spoiled and one teenager who is not. Related Articles
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