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Why Affiliate Marketing Is Cost Effective For Product Vendors

September 26, 2009 By Ron Leave a Comment

Affiliate marketing is perhaps the most cost efficient and well-balanced forms of marketing there are for product vendors.

The balance between what a company pays for when advertising their product or service is perfectly weighed against the end results.

This doesn’t really exist in other forms of marketing that are out there.

Affiliate Marketing Has Made The Selling Of Products More Effective

Why Affiliate Marketing Is Cost Effective For Product VendorsIn the olden days of commerce, in actual fact it wasn’t really that long ago when you think about it, consumers were made aware of products in what was, by today’s standards, quite inefficient.

For the most part these methods of spreading product awareness are still in use and still generate fortunes for some within the marketing world, but they just don’t live up to the proven and less expensive benefits of online affiliate marketing.

What used to happen was that a product would be released to the market and a consumer would find out about it from one of three basic ways. The first way was to happen upon it in a store, whether by fluke or do to good product placement.

The second was to discover the product through an advertisement, in which the makers of the product or providers of the service would hope to convince that consumer to buy. The third was through simple word of mouth.

Do The Old Marketing Methods Still Work…

Any of these methods could have and still do produce great results. They are after all still in use for a reason. Still, as is shown again and again, the results are quite often out of balance.

TV marketing is a good example for this. In the case of television ads, business pay a substantial sum of money in order to reach millions of consumers, knowing that the pay off will come from only a small fraction of those consumers.

Again, a small fraction buys but the whole lot was paid for.

Just how that form of marketing is inefficient should be obvious by now. Affiliate marketing though is able to escape this problem. With this type of marketing program, businesses pay for results and nothing more.In other words the affiliates are building the sites and marketing the products themselves whether it is from free search engine traffic or using Google AdWords to promote the vendors product or service and this is all at the affiliates cost.

The results may be actual purchases of products or services or they could be simply proven exposure to a potential customer, but it is accurate to say that the business gets what they pay for and no less.

What Are The Three Basic Affiliate Marketing Methods…

To clarify, it’s important to understand the three basic ways affiliate marketing can take place. The first is when a company pays an affiliate marketer for every time a site visitor clicks on their ad (PPC Advertising). The second is similar to that of the cost per click marketing method, but the payout comes with every thousand visitors the ad is shown to.

The most used method is actually paying the affiliate marketer for every time a visitor follows the affiliate link or banner advertisement and purchases that product. This is where you make your commission or what ever the agreed payment is.

So it should be clear how much more cost efficient those methods are than the traditional ways consumers are made aware of products. Especially in the latter example, the one that makes up a good eighty percent of affiliate marketing programs, a company pays for the results they want and nothing more with affiliate marketing.

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Ron Cripps the author of AffiliateXFiles has been online since 2001 full time firstly starting his own business selling e-books.

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