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How to Make Money from Affiliate Programs

March 6th, 2010

affiliate-program-money.jpgA new website is unlikely to gain advertising sponsors straight away, but this does not mean that you automatically have to wait until your website has become established before you can start earning money from it. Rather than expecting to sell advertising space right away, new website owners are probably better off by participating in affiliate advertising, as this is easier to get involved in when your site has yet to become well known.

What Are Affiliate Programs?

To sum it up briefly, an affiliate program provides the opportunity to earn “commission” payments by referring your website visitors to the advertiser’s products or services. The Amazon Associates program is a prominent example of an affiliate program. By placing Amazon banners or product links on your website, you can earn referral payments if one of your visitors clicks on the link and goes on to buy a product through Amazon.

How Much Can I Earn From Affiliate Programs?

Affiliate programs will use one of three different payment schemes, and this will strongly affect your earning potential.

1. Pay Per Impression (CPM): For this method, you are paid according to how many thousand impressions (the amount of times that the advertiser’s banner is displayed on your website) you receive. For example, a $2 CPM means that you will be paid $2 for every 1,000 impressions of the banner. In general, the amount that you will receive is relatively small but it can soon add up as each visit to your site results in another impression of the banner, which means that your earning potential increases as you gain more website visitors.

2. Pay Per Click (PPC): Under a PPC model, you earn money when one of your website visitors clicks on one of the advertiser’s banners. In general, the amount that you will earn per click is more generous than with the CPM scheme, but you will usually find that only a small proportion of your website visitors are compelled to click on one of the advertiser’s banners. The conversion rate tends to be lower than for CPM schemes, but you can earn more on a website that receives good traffic as there is greater potential for clicks.

3. Pay Per Sale or Lead: For this payment scheme, you earn money when a website visitor clicks through one of the advertiser’s banners and completes a specific action, such as making a purchase or signing up for a service. You will usually get paid more than you do with the CPM and PPC schemes, but it has a lower conversion rate and you will almost always find that few of your website visitors will actually complete the action for you to be paid.

How Can I Increase My Earning Potential?

Many website owners earn relatively little from affiliate programs as they only go as far as putting up some random affiliate links and hoping for the best. However, to really maximize your earning potential, you need to go far beyond this and put in some all-important groundwork before you can expect to earn a decent amount of extra income from affiliate programs. Here are some tips for increasing your earning potential.

1. Build a relationship between your audience and the products being sold: As pay-per-click and pay-per-sale affiliate programs rely on your website visitors clicking on or through the advertiser’s banners, you need to match your chosen advertisers to reflect your website’s target audience as this is much more likely to achieve higher conversion rates for these particular schemes. For example, if your website offers health and beauty advice, try selecting advertising that is linked to health and beauty products as this is more likely to be of interest to your website visitors.

If you would rather forgo this step, you can sign up for an affiliate program like Google Adsense, which automatically selects advertisements that fit your website content. These will predominantly be text-based ads (rather than product image links) of the CPM and CPC variety, which means that you will need a significant number of targeted visitors to be able to achieve similar earnings to the pay-per-sale models that you can run if you are prepared to choose your own advertising options.

2. Increase your credibility: Visitors to your website are more likely to buy advertised products if they trust you. This level of credibility can take some time to be built up and will not happen overnight. By creating content that your visitors will find useful, you can establish yourself as an expert in the subject and can then win their trust further down the line.

3. Be honest: Being honest and impartial is another way to gain credibility in the eyes of your website readers. If a certain product is not worth the price tag, posting a positive review to fool your visitors into buying it to boost your affiliate earnings will do significant damage to your reputation as a trustworthy website owner, and whatever affiliate sales you may gain in the short term will not become repeat business. You also run the risk of having negative word-of-mouth from the visitors that you misled ruining your chances of receiving sales in the future because your status as someone whose advice should not be acted upon may spread.

If you want to earn more money from affiliate programs, you need to take the time to tailor your advertising to your target audience and establish yourself as an impartial expert who will not purposely mislead your website visitors to increase your referral earnings. It will take some months or even years to do this but if you are patient and willing to put in the groundwork, you can find yourself making good money from affiliate programs.

This article was supplied to us by “Sally A.” from Constant Content.

4 Responses to “How to Make Money from Affiliate Programs”

  1. comment number 1 by: Paul Germana

    I think that as long as an affiliate program follows through on providing what it offers up front, without requiring more than the initial fee or monthly cost, then it is forthwith and trustworthy. There’s nothing worse than signing up for a program, only to find that you were being coerced into an upgrading maze. Not to say that upgrading is taboo. It’s an excellent incentive when respectively used, but easily abused by unscrupulous or inconsiderate internet marketers.

  2. comment number 2 by: faizsuberi

    this is what i’m doin right now. not really a fan of ppc and cpm but i do a bit of affiliate marketing while i wait for my website to be known.
    great post. thanks

  3. comment number 3 by: Paul Germana

    Internet Marketing does not have to be expensive. We tend to think that if we buy the best programs, products and services that we will be successful. Unfortunately that’s not the case and thousands of people waste millions of dollars. They never learn to market or use those tools. Anyone who will just calm down and do what they know they need to do, will see a way to make money online. I spend $10 a month, but I use the wealth of resources that are available to me. There is no cracked code. People who say this don’t really make a lot of money online. However there is one thing that can explode your sales, like magic. That is writing a good article, with an optimized title and and creating back links to your site, where that article is. The most important truth online is not “content is king”, but rather that Relevance Is Queen! If your content is not relevant you will stay broke. We should use email, traffic exchanges and safelists, but the most important thing is creating a collection of relevant content. This requires blogging, ezines and press releases. Press releases are not a must, but they can definitely get a lot of eyes on your articles and continued interest in your over all content. At some point they do make the most sense.

  4. comment number 4 by: Eamon Diamond

    We tend to think that if we buy the best programs, products and services that we will be successful. Unfortunately that’s not the case and thousands of people waste millions of dollars. They never learn to market or use those tools. Anyone who will just calm down and do what they know they need to do, will see a way to make money online.

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