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The Story Behind Affiliate Networks
An affiliate network is basically an intermediate between publishers and merchant affiliate programs. Affiliate networks help publishers or affiliates as they are usually recognized, to easily know the affiliate programs that will generate more traffic and hence more income for their websites. This also allows the online merchants to market their affiliate programs to all publishers who are participating in the affiliate networks. It is a mutually helpful scheme for publishers and internet merchants to get together at one place and reap in the benefits.
Affiliate networks are based mostly on the concept of revenue sharing that is, they let merchants give a part of revenue produced to him from visitors to the publisher's website. There might be a fee for each visitor on the site that undertakes and performs a certain action like making a purchase, or for signing up and subscribing for a newsletter or a magazine. But generally revenue sharing is the standard method in comparison to or opposed to a fee-per-action model. Affiliate networks with many advertisers also attract a large group of the publishers. Big affiliate networks usually do not need to hire publishers as the publishers already head to them on their own. Generally websites that draw in the same kind of customers as the advertisers but without any competition in them are typical affiliate network partners.
Affiliate networks have grown very quickly since their debut. Seen as marketing toys in early days of internet, they have develop into an integral part of business plans of many companies around the world. In reality they have been so successful that they have grown into bigger businesses than the present offline business. The total revenue amount produced according to one source by affiliate networks is £2.16 billion in UK alone for the year 2006. And In the same year for the USA the total bounty amounted nearly US $ 6.5 billion.
Affiliate networks are mainly used in variety of sources like retail, gaming and gambling, personal finance, travel, education, telecom and also publishing. Typically the affiliates are welcome to join the network free of cost while there is mostly a nominal fee for the merchants in order to participate. The network also charges the first setup or a membership fee which can be recurring. Although affiliates join free of charge, but they pay a particular percentage of their income as commission to affiliate network.
Affiliate networks are a huge conglomeration of publishers and merchants working towards a common objective; profit realization. Merchants bring in benefits like tracking technology, payment processing, reporting tools and a large pool of publishers out of the affiliate network. However, affiliates bring in services and benefits like affiliate programs, reporting tools and also payment aggregation using the network.
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