The phrase, "Affiliates are an extended sales force for your business", which is often used to explain affiliate marketing, is not completely accurate. The primary difference between the two is that affiliate marketers provide little if any influence on a possible prospect in the conversion process once that prospect is directed to the advertiser's website. The sales team of the advertiser, however, does have the control and influence up to the point where the prospect either a) signs the contract, or b) completes the purchase.
Some merchants run their own (in-house) affiliate programs using dedicated software, while others use third-party intermediaries to track traffic or sales that are referred from affiliates. There are two different types of affiliate management methods used by merchants: standalone software or hosted services, typically called affiliate networks. Payouts to affiliates or publishers can be made by the networks on behalf of the merchant, by the network, consolidated across all merchants where the publisher has a relationship with and earned commissions or directly by the merchant itself.
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Affiliates were among the earliest adopters of pay per click advertising when the first pay-per-click search engines emerged during the end of the 1990s. Later in 2000 Google launched its pay per click service, Google AdWords, which is responsible for the widespread use and acceptance of pay per click as an advertising channel. An increasing number of merchants engaged in pay per click advertising, either directly or via a search marketing agency, and realized that this space was already occupied by their affiliates. Although this situation alone created advertising channel conflicts and debates between advertisers and affiliates, the largest issue concerned affiliates bidding on advertisers names, brands, and trademarks. Several advertisers began to adjust their affiliate program terms to prohibit their affiliates from bidding on those type of keywords. Some advertisers, however, did and still do embrace this behavior, going so far as to allow, or even encourage, affiliates to bid on any term, including the advertiser's trademarks.
In 2006, the most active sectors for affiliate marketing were the adult gambling, retail industries and file-sharing services.:149–150 The three sectors expected to experience the greatest growth are the mobile phone, finance, and travel sectors. Soon after these sectors came the entertainment (particularly gaming) and Internet-related services (particularly broadband) sectors. Also several of the affiliate solution providers expect to see increased interest from business-to-business marketers and advertisers in using affiliate marketing as part of their mix.:149–150
In some smaller markets in the United States, a station may even be simultaneously listed as an affiliate of two (or in rare cases, three) networks. A station which has a dual affiliation is typically expected to air all or most of both networks' core prime time schedules – although programming from a station's secondary affiliation normally airs outside its usual network time slot, and some less popular programs may simply be left off of a station's schedule. Dual affiliations are most commonly associated with the smaller American television networks, such as The CW and MyNetworkTV, which air fewer hours of prime time programming than the "Big Four" networks and can therefore be more easily combined into a single schedule, although historically the "Big Four" have had some dual-affiliate stations in small markets as well and in some cases, affiliates of more than two networks (including a few that had affiliations with ABC, NBC, CBS and DuMont during the late 1940s through the mid-1950s, when fewer television stations existed in a particular market, especially those that would eventually be able to support four commercial outlets).
In larger markets, multiple full-service channels may be operated by the same broadcaster using broadcast automation, either openly as duopoly or twinstick operations, or through the use of local marketing agreements and shared services agreements to operate a second station nominally owned by another broadcaster. These may be supplemented by LPTV or repeater stations to allow more channels to be added without encountering federally imposed limits on concentration of media ownership. Often, the multiple commonly controlled stations will use the same news and local advertising sales operations, but carry different network feeds.
Websites and services based on Web 2.0 concepts—blogging and interactive online communities, for example—have impacted the affiliate marketing world as well. These platforms allow improved communication between merchants and affiliates. Web 2.0 platforms have also opened affiliate marketing channels to personal bloggers, writers, and independent website owners. Contextual ads allow publishers with lower levels of web traffic to place affiliate ads on websites.
In Canada, affiliated stations may acquire broadcast rights to programs from a network other than their primary affiliation, but as such an agreement pertains only to a few specific programs, which are chosen individually, they are not normally considered to be affiliated with the second network. CJON-DT in St. John's, Newfoundland, nominally an independent station, uses this model to acquire programming from CTV and the Global Television Network. CJNT-DT in Montreal formerly maintained dual affiliations through both City and Omni Television to satisfy its ethnic programming requirements due to its sale to Rogers Media in 2012. This model eventually ceased as Rogers' was granted a request by the CRTC in late 2012 to change the station's format from a multicultural station to a conventional English-language station, and contribute funding and programming to a new independent multicultural station, CFHD-DT, which signed on in 2013.
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Affiliate marketing is an ideal solution for those looking to gain control of their own income by focusing on performance-based revenue options. Working in tandem with a seller, a motivated affiliate marketer will be able to achieve a passive income from the comfort of their home without worrying about producing their own product or service. Although the success of the job does depend on the affiliate’s marketing skills, it can prove to be an effective way to meet your income goals as either a primary career or a profitable second job.
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Affiliate marketing has grown quickly since its inception. The e-commerce website, viewed as a marketing toy in the early days of the Internet, became an integrated part of the overall business plan and in some cases grew to a bigger business than the existing offline business. According to one report, the total sales amount generated through affiliate networks in 2006 was £2.16 billion in the United Kingdom alone. The estimates were £1.35 billion in sales in 2005. MarketingSherpa's research team estimated that, in 2006, affiliates worldwide earned US$6.5 billion in bounty and commissions from a variety of sources in retail, personal finance, gaming and gambling, travel, telecom, education, publishing, and forms of lead generation other than contextual advertising programs.