A publisher is an individual or company that promotes an advertiser’s product or service in exchange for earning a commission. Advertisers contractually agree to work with a publisher, then provide the publisher with creative – in the form of links, banner or text ads or even unique phone numbers – that the publisher incorporates into their website.
Affiliate marketing is very appealing to some publishers as well, because it can allow them to make considerably more money than they would under an alternative monetization strategy. Though the specifics of payout arrangements can vary a bit, in general affiliate payments will be significantly larger than the revenue generated from a click under a CPC pricing arrangement (or the effective CPC under a CPM arrangement). For high margin products such as e-books, for which there are no material costs, affiliate margins can be as 50% of the total purchase price. So it’s not unheard of for affiliates to generate $100 or much more from each referral.
To explain this a bit further, let’s consider a real life example. Below is a screenshot from AffiliateTip.com, a popular blog run by affiliate marketing guru Shawn Collins. In his right sidebar, he has a number of affiliate links for products such as HootSuite, Dropbox, and Bluehost
Let’s assume that the aggregate click rate on this affiliate link section is 1%, that 20% of referred visitors convert, and that the average commission is $10. For every 1,000 visitors:
- 10 click through to an affiliate link
- 2 end up purchasing something from a merchant
- $20 in revenue for the publisher is generated
The end result in this hypothetical is $20 in revenue–significantly more than the $3 or $4 that could be earned from traditional display advertising.
Of course, the revenue per visitor is highly dependent on the click and conversion rates. But the hypothetical above should illustrate that if you’re able to find quality, relevant affiliate offers, affiliate marketing can be a very attractive monetization opportunity.