Affiliate Marketing

Affiliate Marketing

   Even though the word seems to be unfamiliar, all of us might have experienced 'Affiliate Marketing' directly or indirectly,especially if you are  part of the e-commerce world.  "Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's own marketing efforts".  In more simple words, "affiliate marketing is the marketing of products or services that are not your own" . It is the  strategy that allows one company to expand their marketing  with the efforts of their affiliate company or companies. In internet world the strategy may look alike with regular internet marketing. But there are some features that make affiliate marketing unique and provide a special scheme of functioning. Lets have a look into the structure

1)Merchant
2)Network
2)Affiliate
3)Customer

   A merchant can be a retailer or a brand. He is the one who wants to advertise and sell the product. The network  used can be of any sort, but dominantly internet prevails. An affiliate partner signs up to advertise the merchant's goods or services in order to direct a customer to the relevant web page which contains the information about advertised goods or services. For every customer an affiliate gets affiliate marketing commission.

The various compensation methods used in affiliate marketing are as follows

1)cost per sale (CPS) : It is a type of profit sharing strategy and accounts for about 80% of affiliate compensation programs
2)cost per action (CPA) : Here the advertiser pays for each specified action (a purchase, a form submission, and so on) linked to the advertisement.
3)cost per click (CPC) : A visitor must not only be made aware of the advertisement, but must also click on the advertisement to visit the advertiser's website for the affiliate to  receive a commission
4)cost per mille (CPM) : Cost per mille requires only that the publisher make the advertising available on his website and display it to his visitors in order to receive a commission

   In the first three methods the merchant must identify the exact Affiliate to pay him the commission. There are many types of affiliate tracking softwares available in the market. Such softwares extract affiliate link - The web page that directed the customer into the product page using different method, and identify the affiliate.

   Zesty Beanz has developed a solution to manage affiliates, in OpenERP.  A model that keeps affiliate details along with all the links he uses for promotion. Here ERP is integrated with a web portal  that acts as a front end for sales. When a good or service is sold the information is  updated in OpenERP. During this updation the affiliate link also is passed from portal to Open ERP. OpenERP searches its databse for the link, identifies the Affiliate and updates his commission automatically based on pre-defined parameters.