The following section describes an example from real world of Affiliate marketing helping an online
vendor to increase sales through a successful marketing campaign. This vendor can be anyone selling any common or rare products ranging from rare flowers , scented candles or tasty chocolates as well.
The various aspects of a successful campaign are described from the perspectives of all the entities involved. The below schematic depicts the various workflow involved.
- Merchant wants to sell some items say rare flowers through his website at specific price points, making optimum use of his online advertising budget.
- Merchant approaches an Affiliate marketing intermediary to get connected with an appropriate affiliate network conversely the various competing intermediaries could also approach the Merchant offering their services.
- Once the appropriate affiliates are identified the remuneration model for the affiliate and the intermediary is negotiated and finalized. Using the Link/Ad creation interface, provided by intermediary, the merchant joins the network and creates the text, banner ad’s which will link to his site.
- Affiliate participates in the offer extended by the merchant and establishes the business relationship using the interface provided by intermediary.
- Gets access of the Ad links created by the merchant, takes the link code and publish the ad link in their website.
End user/Consumer perspective:
- End user/consumer views the ad placed in the affiliate website and on clicking it they are redirected to the merchant site (product1.com) via the intermediary server where it gets tracked.
- End user view the ad and proceeds with the purchase or provide their details in merchant site where by a sale/lead is generated.
- The above action gets tracked by the merchant server and they get to know that a sale/lead has occurred.
- Merchants report the sale to intermediary by means of transaction (reporting) methods which would contain the affiliate code, sale amount, and quantity of products purchased.
- Reported transactions (sales) are cross checked by the intermediary with the clicks they tracked.
Commissioning & Payment:
- Based on transactions reported merchant generates 2 invoices (For Affiliate and Intermediary) in the interface provided by the intermediary and sends the payment to the intermediary.
- Intermediary cross check the invoices generated and ensure that appropriate commission is credited to affiliate based on the offer set by merchant.
- Intermediary also gets the appropriate commission from the merchant as agreed in the merchant membership agreement.