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Affiliate Marketing, It’s Pros and Cons

Four years after the Internet was born, an online company called CDNOW started the online transaction called “BuyWeb”. Purchases are done by clicking the item on their website, that you are interested with. Also, it functions independently from a storefront.

This was the first profitable form of affiliate marketing, and many other online and e-commerce sites soon followed suite with similar programs (Amazon.com being an example.) Affiliate Marketing has now become a consistent method of advertising and selling, and now forms a large part of many company’s marketing strategies. It is cheap, effective, and has little to no risk for all involved.

The most common scheme used in affiliate marketing is CPC or Cost-Per-Click. In this system, the affiliate reels in commission for each redirected reader to the merchant’s website. Affiliates post ads or link on their website that readers click, and they are sent automatically to merchant’s page. CPC is rarely used by merchants as they are a number of fraudsters who take advantage of the scheme. These are the dirty tactics used in CPC: false advertisement that is similar to a bait, ad-ware that can infiltrate the visitor’s system, forced click technique, “keyword stuffing”, tracking cookies and many more. Cost-per-click system has been losing its spark because of the frauds.

Merchants would rather utilize Cost-Per Action / CPA or Cost-Per Sale / CPS. These schemes are similar because affiliates receive commission or revenue share when a website reader/visitor subscribes or avails of the merchant’s products being referred by the affiliate’s site.

Let say, you are my merchant and I am affiliated with you. I will be blogging about your products and services, and I will also post a link or ad that would redirect my interested visitors to your site. If that visitor who was redirected to your site bought a product from you, I shall receive a commission or a share from your revenue.

CPA and CPS systems have little or no risk at all for both parties, merchant and affiliate. Hence, these are the preferred form of Affiliate Marketing. It is a good thing that Google’s Latent Semantic Indexing will put CPS to the next level, as it makes it risk-free. The Google’s new Indexing system, automatically finds websites with nonsensical content, or if it has “keyword stuffing”.

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