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The Story Behind Affiliate Networks
An affiliate network is basically an intermediate between publishers and merchant affiliate programs. Affiliate networks assist publishers or affiliates as they are usually recognized, to easily find out the affiliate programs that will get more traffic and hence more revenue for their web sites. This also allows the online merchants to market their affiliate programs to all publishers who are participating in the affiliate networks. It is an equally helpful scheme for publishers and internet merchants to gather at one place and earn the benefits.
Affiliate networks are based on the idea of revenue sharing that is, they let merchants give a part of revenue produced to him from visitors to the publisher's web site. There might be a fee for each visitor on the site that undertakes and performs a particular action such as making a purchase, or for registering and subscribing for a newsletter or a magazine. But usually revenue sharing is the standard method in comparison to or opposed to a fee-per-action model. Affiliate networks with many advertisers also draw in a large group of the publishers. Big affiliate networks usually do not need to recruit publishers as the publishers usually flock to them on their own. Normally websites that draw in the same kind of customers as the advertisers but without any competition in them are typical affiliate network associates.
Affiliate networks have grown very quickly since their debut. Seen as marketing toys in early days of world wide web, they have become an essential part of business plans of many companies around the world. In reality they have been so successful that they have grown into larger businesses than the present offline business. The total revenue amount generated according to one source by affiliate networks is £2.16 billion in UK by itself for the year 2006. In the same year for the USA the overall bounty amounted nearly US $ 6.5 billion.
Affiliate networks are mainly used in variety of sources like retail, gaming as well as gambling, personal finance, travel, education, telecom and also publishing. Typically the affiliates are allowed to join the network free of charge while there is generally a minimal fee for the merchants in order to participate. The network also charges the first setup or a membership fee which can be recurring. Even though affiliates join free of charge, but they pay a particular percentage of their earnings as compensation to affiliate network.
Affiliate networks are a large conglomeration of publishers and suppliers working towards a common objective; profit realization. Merchants bring in benefits like tracking technology, payment processing, reporting tools and a large group of publishers out of the affiliate network. However, affiliates derive services and benefits such as affiliate programs, reporting tools and payment aggregation by using the network.
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