If you're an affiliate marketer or an affiliate manager, please read on for affiliate tips and resources.

Affiliate Marketing Networks

Bloggers must sign up as a PUBLISHER. Businesses are MERCHANTS. You have to sign up for a network first, get accepted, then apply for individual programs in the network. A network has all your stats, links/banners and reports in one place. Plus you get paid from one place, instead of from multiple businesses.

Here are some of the main affiliate networks:

Skimlinks – www.Skimlinks.com

Affiliate Window – www.AffiliateWindow.com (as an affiliate, they have a $5 fee which you get back after your first sale). Here's more about Affiliate Window.

Commission Junction – www.cj.com

LinkShare.com – www.linkshare.com

Share-A-sale – www.Shareasale.com – one of my favorite affiliate networks. Sign up as a business, or as an affiliate.

Avant Link (specializes in the outdoor niche): www.AvantLink.com

Affiilate Marketing: Hire One Employee, Get Hundreds

Say you have a company at an inflection point. You need to sell more to fuel your company's growth but you can't afford to hire a sales and marketing department. Plus hiring has tax, HR and infrastructure implications you're not ready for or don't want to invest in. Your Web site is generating sales, but not enough, and resources are tight.

But what if your employees acted like volunteers, coming to you and only asking for money if they brought you sales? Affiliate marketing is like a volunteer sales force. The draw of affiliate marketing is that it is on a “pay per performance” basis. So you only pay after you get paid. You could have potentially thousands of people selling for you and you only pay them when there is an actual sale. Plus they'll reach niches yougve never thought of. Your own marketing will improve as you learn from your affiliates.

Successful affiliates are expert marketers who can likely sell your products better than you can. And they’re far more motivated than most employees. Not only do they work off smaller margins, but also, each sale counts. They are more willing to test to see what works. They don’t have internal politics keeping them from optimizing their Web pages or making changes.

“There’s essentially no risk, you only pay for what you actually sell,” explains Jeremy Palmer, a top affiliate marketer. Palmer quit his job as a Web developer after discovering affiliate marketing. When you do have the resources to expand your staff, consider hiring one of your affiliates. They will already know your brand and believe in your business.

What is Affiliate Marketing?

On a basic level, affiliate marketing is a referral program. It is a way of promoting businesses on the Web in which an affiliate is rewarded for every visitor, subscriber and/or customer they provide through their efforts. Affiliate marketing is growing more popular. At the recent Affiliate Summit conference in Las Vegas, the keynote speaker, Anne Holland of MarketingSherpa spoke of the potential of affiliate marketing. In 2006, affiliate marketing was predicted to account for about $6 billion or 40 percent of online advertising expenditures (up from $1.5 billion the prior year).

The largest affiliate marketing conference and my favorite for years

Affiliates increase the online exposure of your business. More links to your business can also increase your search engine rankings. Affiliates may try marketing approaches that your business can’t or doesn’t want to use. For instance, it may be very effective to use a basic Web site with very few images and lots of marketing text. This may get sales, but it may not be good for building brand recognition or image. The affiliate can funnel leads through their site but your site maintains your core branding.

MarketingSherpa polled 187 merchants running affiliate programs, and found that fewer than 5 percent of affiliates in the average program bring in more than 75 percent of revenue. Hence the buzzword, superaffiliate. Superaffiliates are the proverbial gold. They are the affiliates who consistently perform well for your business. They are either marketing pros or they know your niche and audience well and believe in your business. These coveted superaffiliates are heavily recruited because they can be so productive.

Set Up an Affiliate Marketing Program

You’re convinced, but where do you start? To understand how affiliate programs work, sign yourself up as an affiliate. In some cases you don’t even need a Web site. Go to Commission Junction (www.cj.com). Choose a company and apply to their program. Many programs give you instant access to ads, coupons, or deals. My favorite is the two free audio books through Audible.com. You not only get the free audio books, but you’ll also make a commission off yourself. Not bad. It’s worth signing up just for that.

PostAffiliatePro - Affiliate Tracking Software

My favorite affiliate marketing software

Determine Your Profit Margins and Payout Structure

Before you create an affiliate program, evaluate your profit margin and know the cost of acquiring a new customer. You need to be able to set up a competitive program that will draw affiliates. In general, programs work best when you have a niche or large profit margins. You’ll have more room to offer attractive payouts to affiliates. You’re competing with several affiliate programs so you’ve got to pay out enough or add other benefits to attract quality affiliates. In addition to good pay structures, affiliates like freedom to market your products in unique and creative ways. If you put a lot of restrictions on your program, you’ll need to compensate by paying higher commissions. Depending on your business decide how you will pay your affiliates.

Will you pay per download, per lead, per form filled out, per subscription, or a percentage of purchases? Will it be a one-time payment or a residual payout? What incentives will you use to reward your top performing affiliates (and what will it cost)? Some affiliate programs pay for repeat business for up to 30 days.

Choose a Tracking Technology

Decide how you will track your affiliate program. Accurate, reliable tracking is vital. Affiliates must be able to trust they will be credited for their work. There are two approaches to tracking affiliate traffic: run your own program with affiliate marketing software or use a third party affiliate network. If you set up your own program, you will have to get tracking software and pay your affiliates directly.

Or, you can go through a network that represents many different companies. They track your program and pay affiliates for you. Since a network is a neutral third party, affiliates can feel secure that they will get paid and can trust that their stats are accurate. Commission Junction and Linkshare are the most well known networks, but they’re on the higher end. ShareASale.com is also respected but more affordable for smaller businesses.

Develop Rules and Conditions

Will you allow downloadable programs (usually referred to as Spyware) or incentive sites (such as mypoints.com which gives incentives to people for visiting Web sites in their network)? Will affiliates be allowed to bid on or use your branded names? Businesses usually have a provision that says affiliates cannot outbid them on their trademarked names. How restrictive will your terms be? Many programs accept any interested affiliate who applies. Others only accept affiliates who meet their criteria. For some, that is a target dollar amount of around $500 a month or more.

Anne Holland runs MarketingSherpa’s affiliate program that is more selective. She notes, “Like most programs, only 10 percent of our affiliates ever made any money. We decided against having affiliates who we could not truly commit to. We consider affiliates kind of like field sales reps — it’s not worth fielding a sales rep unless you are willing to provide them with adequate support.”

Monitor Affiliates and Watch out For Fraud

Fraud is a hot button in affiliate marketing. It can be costly for businesses if they aren’t aware of the common types of fraud on the Internet. Spyware is software that redirects people to a Web page that mimics the official sites and takes credit for orders. Monitor your site for unusual patterns. Look out for fraudulent credit cards, affiliates misrepresenting your brand or deceptive marketing practices.

Educate your affiliates on spam and monitor what methods they’re using to attract buyers. Affiliates should add value to a brand or products (and most do). Fraud is any method used to artificially and/or maliciously to generate clicks or page impressions. These sales or clicks aren’t from people who genuinely want use a service, buy something or obtain information. Consumer Reports started a Web site about online fraud (www.consumerwebwatch.org) to help inform and police the industry.

Recruit, Train, and Retain

Even though you may have hundreds of Web sites marketing the same products, it doesn’t mean the same marketing message or designs work the same for each. Different audiences are motivated by different reasons to purchase. Each site owner has a distinct audience and understands what motivates that audience. Find out what niche sites reach your target audience and recruit from them.

Start by doing a search on Alexa (www.Alexa.com) or search for related terms for your products. Find and keep the best affiliates for your product or services. Affiliates can stop or start promoting your products at any time, so you must court successful affiliates. You can find affiliates at conferences such as Affiliate Summit. Another idea is to search Google for sites that reach your target audience and call them directly, or send them direct mail.

Ways to Incentivize Your Affiliates

Superaffiliates like Palmer evaluate dozens of affiliate programs every day and are often contacted by affiliate managers. Palmer gets flown to corporate headquarters, taken to lunch, and given extra tips on how to present products. Whoever runs your affiliate program has to be good at building relationships. Internet marketing can be solitary, so affiliate marketing management can offer more social interaction.

Here are some ideas to help motivate your affiliates:

Pre-launch some of your new products to affiliate sites.
Provide affiliates their own 1-800 numbers for their customers so they get credit for telephone leads.
Pay a higher commission for top-tier affiliates.
Build personal relationships with your best performers.
Create high converting landing pages.
Provide a list of top performing keywords.
Run contests or sweepstakes.
Create customized content (articles, reviews, comparison charts, etc) for each niche in your space (or to start, just for your best fit affiliates).
Send newsletters with tips and tricks.
Offer training in marketing.
Recognize top performers.

Ask your affiliates what is working for them. Learn what will improve their efforts. Offer training and resources for them and they will continue to promote your business. And that’s truly a win-win.

Affiliate Summit Conference. If you want to learn affiliate marketing from the pros, this is the best conference for affiliate marketing: www.affiliatesummit.com