An affiliate network is essentially an intermediate amongst publishers and merchant affiliate programs. Affiliate networks help publishers or affiliates as they are commonly recognized, to easily find out the affiliate programs that will get more traffic and hence more revenue for their websites. It also allows the online merchants to promote their affiliate programs to all publishers who are taking part in the affiliate networks. It is a mutually beneficial scheme for publishers and internet merchants to gather at one place and earn the benefits.
Affiliate networks are based on the concept of revenue sharing that is, they let merchants offer a part of revenue generated to him from traffic to the publisher's website. There may also 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 generally revenue sharing is the common method as compared to or contrary to a fee-per-action model. Affiliate networks with many advertisers also attract a large pool of the publishers. Big affiliate networks usually do not need to recruit publishers as the publishers usually flock to them on their own. Generally websites that attract the same kind of target audience as the advertisers but without any competition in them are common affiliate network partners.
Affiliate networks have grown rapidly since their debut. Viewed as marketing toys in early days of world wide web, they have become an integral part of business plans of many organizations around the world. In fact they have been so profitable that they have grown into bigger businesses than the existing 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 total bounty amounted close to US $ 6.5 billion.
Affiliate networks are primarily used in assortment of sources like retail, gaming and gambling, personal finance, travel, education, telecom and publishing. Typically the affiliates are allowed to join the network free of charge while there is generally a nominal fee for the merchants to participate. The network also charges an initial setup or a membership fee which are recurring. Although affiliates join for free but they pay a particular percentage of their earnings as compensation to affiliate network.
Affiliate networks are a large conglomeration of publishers and merchants working towards a common goal; profit realization. Merchants derive benefits like tracking technology, payment processing, reporting tools as well as a large pool of publishers from the affiliate network. However, affiliates derive services and benefits such as affiliate programs, reporting tools and payment aggregation using the network.
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