The Truth About Affiliate Programs

The Truth About Affiliate Programs 

© 2002 Elena Fawkner

Affiliate programs are a brilliant idea. For the owner of 
the product, they're a way of recruiting a veritable army 
of salespeople to promote your product without having to 
pay them a dime unless and until they generate a sale. 
For the affiliate, they're a great way of earning extra 
cash from an existing, high-traffic website with virtually 
zero additional effort.

Only problem is, most affiliates don't HAVE an existing, 
high-traffic website and they're suckered into thinking that 
it's a simple matter of signing up for an affiliate program 
and "driving traffic" to the product owner's site using a 
uniquely-coded URL. Well, it IS that simple. And it isn't.

If you don't already have your own high-traffic website, 
how do you think you're going to drive traffic to the 
product owner's site in the hope of generating a sale? 

Well, there are a few ways, actually. And all of them are 
going to cost you either time or money. 

First off, you're going to have to spend money on 
advertising. How much? Well, consider this. Estimates 
vary but, roughly, only 2-4% of people who see your ad 
will actually click on your link. Of that 2-4%, only 1% or 
so of THEM will go on to buy. In addition, it takes, on 
average, 7 or 8 exposures to your ad before people will 
click on it. AND to achieve even these piddly numbers 
your market must be targeted in the first place. This is, 
as you can see, nothing but a numbers game. Pure and 
simple.

So what does all this mean to you, the advertiser without 
a website? Well, to start with you're going to want to 
advertise where a LOT of people are going to see your ad. 
But not just ANY people. People interested in the product 
you're wanting to sell - your target market. So this cuts 
out the free classifieds and FFAs. And it means you're 
going to have to spend advertising dollars.

Where do you go to advertise then? The most effective 
form of advertising is in ezines. Take mine, for example. 
At the time of writing, my subscriber database is around 
14,000. Each week I run an ad for my own opportunity (in 
addition to running ads from other paying advertisers). I 
generally get about 500 click-throughs over the course of 
the 2 or 3 days following publication. That's a click-through 
rate of about 3.6%, about in line with the average. 

If you were to pay to advertise in my ezine, it would cost 
you $70 for a single classified based on my $5 CPM ($5 per 
every 1,000 subscribers) pricing formula. This is not an 
uncommon formula for pricing ezine advertising. You're 
therefore paying around 14 cents per click. That's not bad.

Other than that, what can you do? Well, you can choose 
to spend time rather than money. An obvious choice 
considering what I've just said is to start your OWN ezine. 

Build your own list and over time you will have a large 
subscriber database to put your ad in front of too ... 
and it won't cost you a dime. But this takes time and it 
takes work. It's taken me two and a half years to build 
a list of 14,000 subscribers. And it takes a few hours of 
work to put together the ezine itself including writing the 
feature article. Every week, week in, week out. Is it worth 
it? Absolutely.

And once you're publishing your own ezine, it's a simple 
enough matter to distribute your articles for other ezine 
publishers to run in their ezines. That 4 or 5 liner at the 
end telling readers who you are with a link to your website 
(or, if you don't have one, the website of the owner of 
the product you're selling) is effectively free advertising 
for you. Not all publishers accept article submissions 
though, so be sure to find out whether they do before 
submitting your articles to them.

But think about this. If you're doing all this work anyway, 
doesn't it make sense to create your OWN website (in 
addition to your ezine)? Sure it takes time and it takes 
work and it takes money (but not a lot - hosting fees can 
be pretty cheap if you know where to go). But once it's 
done and you're just in maintenance mode - adding fresh 
content every few days, uploading your latest ezine and 
maintaining your archives - your website does so much 
of the work for you. Generate a few hundred unique 
visitors a day and you can be getting the same click- 
through rate to your affiliate site *for nothing* that you 
were paying someone else 14 cents a click for. EVERY 
SINGLE DAY. 24/7/365.

So, this is the truth about affiliate programs. They're great 
if you're the product owner and they're great if you can 
link to your affiliate site from your own high-traffic site.
But if you don't have your own site, you're going to have to 
buy traffic to your affiliate site - either with money, time or 
both. How many sales are you going to have to generate 
to earn enough commission to more than cover your time and 
costs and leave you with a profit?

Bottom line? Setting out to make money with affiliate 
programs before you have your own site in place is putting 
the cart before the horse. Yes, you want to make money 
and you want to do it quickly. But it just doesn't work that 
way. Not with affiliate programs, anyway. So adjust 
your expectations and do first steps first. It will be slow 
going to start. It will take you weeks to create a worthwhile 
site and then MONTHS to generate the kind of traffic you 
need. But if you take a long-term approach to your 
business and take the time now to lay the proper foundation, 
you'll reap the dividends for years to come.

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Elena Fawkner is editor of A Home-Based Business Online ... 
practical home business ideas for the work-from-home 
entrepreneur. http://www.ahbbo.com