Affiliate Marketing

Affiliate Marketing - a No-Lose Internet Marketing Strategy for Real Estate Agents

Last week we looked at the ins and outs of SEO and learned why it should be included in your Internet marketing strategy. This week we're covering affiliate marketing, a popular and very effective way to produce targeted leads for your business.

What is Affiliate Marketing?

Affiliate marketing is the Internet equivalent of a classic business practice - paying a finders-fee for the introduction of new clients to a business. In affiliate marketing terminology, you, the real estate agent is known as the merchant, while the network of websites that you advertise on are known as the affiliates, or publishers.

Once you set up a network, your affiliates will be rewarded (paid) when they send you traffic to generate leads. Compensation can be based on a certain amount for each visit (pay-per-click), registrant (pay-per-lead), or a commission for each sale (pay-per-sale).

We call affiliate marketing a no-lose strategy because unlike some other marketing techniques, no payment is owed to the affiliate until actual results are generated. Your affiliates get to make money while you enjoy a precise, measurable, and targeted means of advertising your services.

Amazon.com is generally recognized as being the first online venture to get the affiliate marketing ball rolling. In July 1996, it launched its "Associates" program and now has almost half a million sites in its network. You have probably seen how many websites that you visit link to Amazon, and now you know why - there's a lot of money to be made.

How does it work?

Here's how it works - once a website owner registers with Amazon (or any other affiliate site), he can place Amazon banners, links, and/or products on his site. When visitors to his site click through the links and purchase a product on Amazon, the website owner is paid a commission for generating the sale.

No matter what affiliate site you use, the process is usually the same:

Merchants (brokers, agents, etc.) earn revenue by selling products and services.
Affiliates, looking to earn revenue from site traffic, promote the merchants
Merchants pay a commission to affiliates in exchange for leads and sales resulting from their promotions.

There are three ways to use affiliate marketing:

Pay-per-click (PPC) - Every time a potential customer leaves the affiliate website by clicking on the link to your site, a certain amount of money (predetermined by you) is deposited into the affiliates account. This amount can range from a few cents to a few dollars, depending on your budget.
Pay-per-sale (PPS) - Every time you make a sale or get a lead as a result of advertising on your affiliate's website, a percentage, or commission, is deposited into the affiliate's account.
Pay-per-lead (PPL) - Every time a potential client registers at your website as a result of the advertisement on the affiliate's account, a predetermined amount is deposited into the affiliate's account.

In your case, you will probably be using the PPL method to generate qualified homebuyer leads from your affiliates. You can also get creative in your marketing and sell related books and products through Amazon. Don't limit yourself - this is a wide-open market!

There are a variety of ways to run an affiliate program, and you should research the market carefully before adding an affiliate strategy to your online sales channel. Some of the different types of strategies include hosted services, shopping carts with affiliate features, third-party affiliate networks, hosted services, and standalone software. The two most popular affiliate marketing intermediaries are LinkShare and Commission Junction.

The benefits for you

By placing affiliate marketing advertising on websites across the Internet, you get wide exposure without having to do too much work. The more websites you are affiliated with, the more exposure your services will get. All you have to do is allow ads for your business to appear on someone else's website.

This "hands-free approach to Internet marketing lets you get on with your selling and relationship building while the Internet works its magic. As we mentioned before, you don't pay for a thing until a potential client clicks through to your site.

A few words of caution

While affiliate marketing has its benefits, there are also a few drawbacks that you should be aware of. Like all business dealings, you may be judged by the company that you keep. If your affiliates use unethical means to draw customers to their site, you may have to do a little damage control to protect your reputation. Just remember to periodically check your affiliate sites to see if they are doing what you think they are.

Where do I start?

As we mentioned before, two of the best affiliate marketing intermediaries are LinkShare and Commission Junction. Both companies offer different services. For example, LinkShare provides reporting, tracking, and affiliate recruiting. Commission Junction and other sites like it offer those services plus additional services such as cutting checks, sending out tax forms, and responding to webmaster queries.

Of course, you can do it all yourself if you have the time and technical know-how to utilize scripts. You can check out a listing of affiliate scripts at the C.G.I. Resource Index (http://cgi.resourceindex.com/). There you can find scripts ranging from share and freeware to scripts that cost a few hundreds of dollars.

In less than 10 years, affiliate marketing has become a significant component not only of Internet marketing, but of advertising as a whole. Thousands of agents like you are using it to generate qualified real estate leads and increase their revenue. The model is also being continually expanded to drive commerce through the web. But above all else, affiliate marketing is about connecting those who need a service and those who offer it.

Next week we'll be looking at Email marketing for real estate agents - you won't want to miss it!

See you then,

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