What’s an easy way to explain affiliate marketing to a friend, colleague or family? I am sure every affiliate marketer had to ponder on this question at one point or another. Let me suggest a simple explanation that you may find of help.
Short Explanation
You’re a kid. It’s a hot summer day. You know that an ice-cream truck passes your neighborhood, but stops on a street just around the corner. You work out a deal with the ice-cream truck driver where he would pay you 20% (commission) of every ice-cream sold to the kids that you bring to him. You’re an affiliate/performance marketer now.
Longer Explanation
You’re a kid. It’s a hot summer day. You both possess the knowledge of the ice-cream truck’s route, and have access to and means of influencing the ice-cream truck’s primary target audience. You agree with the ice-cream truck’s driver on a remuneration that he would pay you for every kid that you refer his way [20% of every sale would be a PPS/CPS (pay/cost per sale) commission, whereas a flat $2.00 remuneration would be characteristic of a classic PPL/CPL (pay/cost per lead) model]. The guy is interested in growing his business even more, and he agrees to pay you the default 20% commission if the monthly sales you refer do not exceed 15 sales, and 30% if the sales your monthly referred sales exceed 15 sales (tiered commission structure). He also tells you that he’d throw in a $15 bonus on top of your commission with every 15th sale you refer (performance bonus). If you have a access to large numbers of kids that could buy his ice-cream, you can also work out a private deal with him, whereby he would pay you 30% apriori.
Tags: affiliate marketing
Great explanation Geno, thanks!
Thank you, Sharon.
Never read it explained quite that way, but great job!
An excellent analogy on affiliate marketing, Geno.
Just as your comparison is creative, so must a good business person exercise creativity in all aspects of the affiliate adventure.
-Bravo
Thank you, James and thank you, Ron. Glad you liked it.
I thought it’s much more complicated, but it’s actually simple!!! Great! Thanks!
“Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creativity.” /Charles Mingus/
There are things that are complex in every industry (affiliate marketing included), but the basics can always be explained in a simple way.
It’s always difficult trying to explain a unique industry. I struggled with it a bit at first, especially when getting into more depth with search, email, and social media traffic, but eventually settled for a generic ‘online advertising’ answer. Your analogy is great, and hopefully enough to break through some of the confusion.
Thanks, Dina.