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An affiliate marketing program is a referral based marketing scheme which involves the payment of commission to sales persons known as affiliates by the online businesses known as affiliate merchants for any sales lead generated by the affiliate. So in a way affiliate marketing is a revenue sharing program between the affiliates and the affiliate merchants.
What is the purpose of affiliate marketing programs? Affiliate marketing program is one of the most effective ways of promoting goods and services. The basic aim of an affiliate program is to increase visitor traffic to a website and generate sales leads. The affiliate merchant or the business running the affiliate program then pays out certain commission rates based on the sales leads generated on their site by the visitors referred by the affiliates. All affiliate programs involve providing the affiliates with banners, links or pictures of the product/service that the affiliate can display on his website. As the visitor to the affiliates site clicks on the link he gets tracked by an affiliate tracking software and is paid a fixed commission rate. Mostly affiliate programs are risk free means of generating customer traffic and promoting goods and services as it involves paying out commission only if specific objectives are achieved. These objectives could be in terms of increasing site traffic, generating sales leads etc. In addition to this affiliate programs give the affiliate merchants access to free advertising space that in-turn helps in brand awareness if not actual sales. Thus affiliate programs can be considered as a win-win situation for both the affiliates and the affiliate merchants.
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