This is what you get when you do a search in Google for definition of Affiliate Marketing.

I still remember, my early days of induction into world of Internet Marketing, more specifically "Affiliate Marketing."

Till then, I was completely oblivious to this term. For most of us, Affiliate marketing is a term that has different meanings. Let me first move to other side of line and say that affiliate marketing is nothing but unnecessary pop ups, newsletter spam, affiliate tracking code cloaking and much more.

Now from other side of line, Affiliate Marketing is a way to market your products online by signing up affiliates who have websites and are willing to advertise your products on their site, in return earning a certain percentage of commission from sales they generate.

If you take a closer look, for one particular product or a company, you will find server loads of affiliates, marketing company or a product. Now this is an indicator to itself of way you market your products on Internet.

To talk about Affiliate Marketing, this one article would not suffice. Hence, I have divided it into a series of articles. Although I am very tempted to first write about "The tools to improve an affiliate's conversions" let me stick to chronology.

Why does a company need an affiliate program?

Having defined, affiliate marketing, next obvious question that arises is, why a company needs affiliates when it can market its products on its own.

To answer this, while a company may be very huge in terms of infrastructure, or has a really successful product, it cannot sit silent and bank on its own strengths. Further to this, a company cannot customize look and feel of site to suit tastes of local markets. Although there are tools where you can cloak your website, it would involve a lot of complexity in terms of technical and marketing demands. Hence, arises need for affiliates.

What makes a company look for affiliates?

Let’s face it. Every website which has a decent hit rate does enjoy a certain niche market. It is mostly for smaller sites that you see a higher percentage of customer loyalty. There are various reasons to this; one most obvious factor is service and personalization provided by smaller sites. It is sites like these which attract companies to negotiate them into signing up as an affiliate.

The mistakes most companies make: In my experience, working with affiliate program, one huge error made was that most companies which are into affiliate marketing just design specs and set it up on their website and wait for webmasters to sign up with them.

Now you never know kind of traffic you would be attracting. This where 80:20 rule comes in picture and that is how most of companies strategize their affiliate marketing efforts.

A more detailed article about this can be found, entitled: "Eliminating 80:20 rule"

Do you think you are ready to sign up as an affiliate?

This is one rule that definitely rules world of Affiliate marketing. While a company may boast of a high volume of affiliate base it enjoys, fact lies that only 20% of that base are actual driving force for sales of that company.

Leaving that cliched statment, lets talk about more obvious question which is, Why does it hold true and more revelant for affiliate marketing.

The answer to that lies in fact that most companies always tread usual road and well, slowly dissolve into already burgeoning pit of companies that are into afiliate marketing.

How often have you seen a company that is proactively involved in affiliate marketing promotions? Not many right?

One major mistake made by most companies, rather almost every other company is that they do not experiment with new ideas. True affiliate marketing is a vast subject and at some point company does lose its focus once affiliate base starts to build up.

A few suggestions for companies that are into affiliate marketing.

1. Eliminate 80:20 Rule.

Lets take an example of a company that would want to launch its affiliate marketing program. The usual way is to do an e-mail campaign coupled with some CPM deals on portals. The end result of this exercise would be to just increase affiliate base. While above 2 exercises would be a good way to begin program, it does point to one gaping loophole. It opens doors to 80% of junk. By junk, I mean to say sites/webmasters who sign up just for kick of it. They promote product with enthusiasm initially and later it dies down.

To eliminate 80:20 rule, companies should focus on building a niche market rather than concentrate on increasing its reach to more affiliates. To begin with, proper research needs to be done with regards to really good quality sites. These sites are ones which enjoys a good viewership, good hits, a loyal and a targeted customer base.

When a company focuses on sites and has a proactive approach, what they can discover is an entirely different market which is more focussed and sales driven. These sites could vary from portals, information sites to personal webpages. Although downside in this is that you would not be able to see a great increase in your affiliate base. The advantage though is that you just get a step closer to a better balanced ratio of sales versus total workforce.

2. Personalization from beginning.