Affiliate Marketing: Experiences of Different Companies

Introduction

Internet technology is penetrating into the customer domain with a rapid pace leaving other media like television and telephone far behind in terms of reach (Angeli & Kundler, 2008). Internet undoubtedly is set to become the fastest medium of marketing communication. Marketers also are looking it as a potent medium to promote their products and services (Zeff & Aronson, 1999). It has become an instant source of information using a wide array of search engines and numerous websites leading to increasing user-base.

The reason for adoption of internet as a marketing platform can be attributed to a variety of reasons. Reasons cited by Chaffey (2000) for its fast growth include interactivity between user and website, intelligence in the form of information reservoir, individualization by one to one interaction, integration into existing communication media, industry restructuring through redesigning of strategic outlook and independence of location.

Interactivity:Internet provides an opportunity for two way communication to the user which is mostly initiated by the user himself. It works as a platform to share dialogue in place of one dimensional ad which only conveys a message and lacks instant feedback.

Intelligence: Internet works as a source of pertinent information which provides user all the information he requires at a click, be it price comparison, attribute comparison, methods and procedure, reviews, etc.

Individualization: The best part of internet is its ability to offer one to one interaction, which can facilitate personalization and a customized approach towards the user and help providing user with filtered information and offerings.

Integration: It provides a platform to complement marketing endeavours by integrating personalized and non-personalized marketing messages through audio visual static and dynamic ads and forms.

Industry Restructuring: Internet has compelled companies to rethink and redesign their marketing campaign as newer ways of approaching and operating can be facilitated through web interface.

Independence of Location: Internet and its use has eased the biggest constraint associated with place. Now offerings are independent of location and can be reached from any location equipped with internet facilities.

Affiliate Marketing

The emergence of internet as a strong medium of communication has also led to the emergence of numerous marketing avenues with many companies realizing its potential for promotion of their products (Liang & Huang, 1998). Online marketing platforms offer various opportunities for directing customers towards the products through online advertising, affiliate marketing, search engine optimization, direct mailers, etc. Moreover, it also facilitates segmentation of users based on their interests which may be targeted by marketers subsequently.

Though affiliate marketing has its history before the advent of internet (Buhalis, 2001) but later offers various new opportunities. Affiliate marketing is proving itself as a method of promoting product in very less time (Brown, 2009).It has been described as a process where “an online retailer places a link for its business at a host business’s site. The host earns commission whenever a visitor clicks the link and consummates a transaction with the sponsor” (Papatla & Bhatnagar, 2002, p.69). Amazon is one such company which utilized affiliate marketing in the middle of 90’s to boost its business and set an example for others.

Affiliate marketing is profitable for all the parties that is, the merchant and the affiliate. The merchant is the seller who places his banner, ad, etc. on the other’s website which is owned by the content provider i.e. host or an affiliate. The affiliate earns commission for each referral which is tracked by cookies (Bandhyopadhyay et al.,2009).