Affiliate marketing is one of the most effective methods for significantly increasing the size of an online business and has proved to be a cost-efficient, measurable method of delivering long-term results.

Affiliate marketing is a cooperative effort between a merchant and an affiliate in which affiliate agrees to promote the merchant’s product on their website or by other means by linking to the merchant’s website. In exchange, the merchant pays a commission to the affiliate. In most cases, the merchant will pay the affiliate only when a customer clicks on the product link and actually makes a purchase. Some, merchants, however, do chose to pay a commission merely for clicks.

There are many benefits to affiliate marketing and creating a strong affiliate program.

Affiliate programs are somewhat risk free. You pay for results, rather than advertising that may or may not target your market. When you include an affiliate marketing program as part of your advertising plan, you are sure to receive directed advertising that works, and if it does not work then you don’t pay for it. Paying for effective advertising is what affiliate marketing is all about. However, the exact way you pay your affiliates is up to you. You might choose to pay your affiliates a percentage of the sale or a flat fee for finding a new client, or come up with a different commission structure. Moreover, you can advertise on a wide variety of websites without having to negotiate lots of different prices. You make an offer, and the publisher decides whether to work with it. The more attractive the offer, the more likely the best affiliates will start to promote you. The more they promote you, they more you sell.

Affiliate programs give merchants a broader market to advertise their product or service to. It gives the product or service the maximum exposure that it may not get with other traditional advertising techniques. With an affiliate marketing program you develop a network of individuals working to promote your product. This network grows and grows and becomes larger and more powerful each day. Each new affiliate adds a link to your website, which simply increases your target market. So, each new affiliate allows your targeted market to grow larger in an exponential manner and reach unlimited amounts of individuals all over the web and the globe. Affiliate marketing is the equivalent of having an army of sales people who do all the promoting, and who only get paid a commission if a customer purchases. If their efforts fail to make a sale, the merchant incurs no expenses. The burden of performance is, thus, squarely placed on the shoulders of the affiliate. Thus, the more affiliate sites a merchant has, the higher the traffic, and the higher the chances of converting visitors into sales. But more doesn’t mean better. As such, don’t obsess over the number of affiliates in your affiliate program. Instead, concentrate on optimizing the performance of the affiliates already in your affiliate program

Also, with each new link your website may rank higher in search engines so you not only increase your market, but you also increase your search engine results. The amount of websites linking to your site as a result of your affiliates means exposure and the more exposure you have, the more results your targeted marketing and advertising plan will receive. An affiliate program truly is the perfect answer to your advertising needs and is affordable as well.

An affiliate program furthermore enables you to collect some measurable and predictable data on individual affiliates or the affiliate program as a whole. This will aid you in forecasting the future performance of the affiliate program. You decide what type of advertising is effective and reaches your market and what does not. You can choose between an email lead, actual sale, a new subscriber to your newsletter, or even a download of a particular product.

There are numerous reasons to have an affiliate program, but merchants just getting into the field shouldn’t expect immediate sales results. Placing your merchandise with an affiliate program is the same as training a new sales assistant. It will take time and training to reach the fullest potential.

Depending on the staffing capabilities the merchants may choose to run a program using their own in-house resources or they may outsource the program to an agency, but they shouldn’t try to run an affiliate program on auto-pilot. It just doesn’t work!

Most people are familiar with the saying, “Second Place is the First Loser”. The goal of every business, sports teams, and individual is to be number one. Being on top is a great accomplishment. However society influences us to believe that there can only be one winner. Is second place really the first loser?

There has been a lot of news in the Industry about Yahoo lately. The most recent being Microsoft Corp. making an unsolicited $44.6 billion cash and stock bid for Yahoo on Friday, February 1, 2008. Yahoo recently announced their plan to layoff 1,000 workers due to a 23% decrease in profits from 2006. Yahoo reported a fourth-quarter profit of $205.7 million down from $268.7 million. It’s obvious that Yahoo continues to lose its stance next to Google. Google captured nearly all of the search growth in the fourth quarter of 2007. When comparing fourth quarter 2006 to 2007, Yahoo’s market share dropped by 25%, falling from 24.1% to 17.9% of total search advertising dollars. Google, however, increased its presence, going from a 70.5% to a 76.6% share. By now, everyone has either heard about or discussed the fact that Yahoo should step out of search and outsource that function to its top competitor. Google has won, so why should Yahoo even compete?

Yes, being number one is a goal of every company, but being number two in a dynamic industry, is still a great accomplishment! Many users prefer to use Yahoo over Google. Although Yahoo’s market share doesn’t come close to Google’s – it is still a valid place for users to search.

I enjoy being given a choice! I am not a big fan of monopolies of any sort. What if we only had one type of soda, airline, or shirt to wear? Things would be monotonous and boring! Better yet, what if we only had one cable or internet provider? That particular provider would have zero competition, which in turn would result in astronomical prices and limited options.

As a Client Strategist, I tend to use Google most of the time when I search, but I still like to keep my options open and search on other engines every now and then. People are different, and enjoy different things. Competition is healthy for the economy. Therefore, there will always be room for second place players.

Don’t give up Yahoo, I still believe in you!