Affiliate marketing in e-commerce can be defined as a commission payment a website or an e-commerce portal pays to another website for bringing traffic. One of the earliest successful affiliate marketing campaigns was rolled out by Amazon. Many partly credit Amazon’s success and brand recall to its affiliate marketing campaign where it rewarded websites for hosting Amazon links.
Amazon paid commissions to third party website in instances potential customers clicked on Amazon link from these websites. What it did for Amazon was to rapidly build brand recognition and generate traffic volumes that an independent and stand alone website could not manage to do in a short period of time.
For what was crucial to Amazon was the number of people who visited the website.
This helped spread the word about books being available to purchase on the website. Amazon had a new business model and hence not all people would be the leaders and go for a new medium of purchasing books.
The ideal customer segment could be reached must faster from affiliate marketing than the traditional mass media television or print advertising. Also customer segments who visited third part websites were most likely to use internet for purchases than customer segments that used television and print media as their primary reference source. However, it’s been several years since Amazon started its operations and now there is a sizeable customer segment which uses the combination of internet, television and print as primary sources of information.
Hence what affiliate marketing did for Amazon by generating web traffic was:
A lot of ecommerce business models are using affiliate marketing consultants and agencies that place advertisements on related websites and help generate higher website traffic.
These consultants do not have a website of their own and act as a common platform between various ecommerce models.
2. Ecommerce
To establish an ecommerce model one needs to take care of several factors. Namely:
In the late 1990’s and early 2000 a lot of ecommerce business ventures were setup. However few survived the dotcom bust. This was partly because they felt that a brick and mortar model is losing its relevance and they caught on to the fad of ecommerce. However as the years have gone by, people have realize that if suitably used both models have their merits and demerits.
What is important to take plan is whether a brick and mortar support is needed for an ecommerce model. For e.g. if an ecommerce model revolves around sending across garments and gifts across the world, then does it need to have physical storage outposts to minimize on the delivery of products. There could be purely an ecommerce model which involves information technology where the services and products can be bought and sold online. For such a model a brick and mortar model as support might not be needed.
The revenue generation model is crucial to the success of the ecommerce model. A lot of dotcom companies have succeeded earlier in attracting visitors but have failed to generate it into revenues. For e.g. America Online (AOL) had a business model of selling its content to users apart from other revenue streams.
However that model met with limited success. For the model in certain cases required the user with a different broadband network to pay charges to its broadband service provider and shell out additional money for accessing AOL content. But as AOL found out, its content was not being able to command a sizeable share of the market as content today is generalized and ready available in many instances for free. Hence AOL shifted its business model to targeting advertisers.
A more specific example of revenue generation through ecommerce is Google and Amazon. Google initially started with presenting the users with the best information retrieval system. However with the advent and growth of internet marketing they use something known as AdWords which helps them over contextual advertising based search results. Hence, Google has made a business model around the keyword searches that users continuously input into its search engine. It does though still continue to promote free placements on its search engines and is reportedly giving preference to same in its search engine algorithm.
The target audience and its purchase behavior are also very important. This is true both for businesses that operate within a specific country or across the globe. Take the example of an organization which offers its digital services. However to get access to these services customers need to download a software on their machines.
The particular company later on found out that though many users were expressing interest in their services and attempting to download their software eventually not everyone was using their services. When they drilled down to the problem they found that a particular customer segment had a high ratio of accepting the service offering and going ahead and downloading the software to start using the service vis-à-vis another customer segment which had a poor ratio on a similar metric.
Analysis revealed that the segment with higher probability of downloading software and starting to use its services had access to a broadband connection and were technically more skilled. This played an important role as the software took long to install and anyone who didn’t have a broadband connection would take ages to download this particular software and might end up not downloading same. Also there were technical difficulties while downloading due to some server hosting problems. The technically sound customers were able to read through the help yourself section and fix the process whereas the other non-technical customer segment was averse to a do it yourself methodology and instead not to go ahead and avail the services.
Hence understanding the customer segments and their needs is an integral part of the ecommerce strategy.
We have already discussed affiliate marketing. It could form an intrinsic part of Internet marketing strategy if large volume of visitors is one of the key component of business growth.
Web analytics has various sub-aspects such as tracking customer traffic source, customer’s movement across the web pages, identifying various segments and their behavioral characteristics, website content optimization, etc. The focus of web analytics is to improve the customer experience by providing relevant content and services according to needs of various customer segments.
An effective internet marketing strategy aided with insights from web analytics provides a website that is
One important growing area of Internet marketing is blogging. Blogs are sources of information to customers worldwide and they tend to provide various diverse views. Customers can also write blogs thereby getting an outlet to express their preferences. Blogs can be of help to varied businesses. For service providers, blogs provides customers to discuss the service levels and post their feedback. For technology offerings it helps discuss latest developments and potential solutions.
A blog might have a short narrative but where it scores is the ability to link to various resources. Resources that could be internal whitepapers or information pages or even affiliate websites or reference materials. It thereby helps in forming linkages. Linkages are what search engines look for when rating a websites search result ranking. Hence the more linkages a website has a result of blogs the more probability that the webpage would be displayed in search result.
Reference resources are what customers look for when they need additional information. Imagine a holiday package and travel provider. Someone visits the website looking for a package to a particular destination. However the provider does not offer the best pricing at the particular moment compared to his competitors.
Having a resource or an article on the destination and the key areas of interest and visit might entice the visitor to download same and use it as a reference material. This is even more relevant for information technology providers, manufacturers and education institutions who publish white papers showcasing products and recent research and developments. Case studies are also an effective way of highlighting business capabilities. They also help provide references and showcase how existing services of an organization have helped their customers achieve their business objectives.
Survey analytics helps website providers to understand customer preferences and attitudes. It helps as being a non-intrusive medium where no amount of calling and visiting the customer is involved. However the questions are often unaided and the customer intent cannot be evaluated. For example a customer might be just be clicking through the answers but there is no way that an analyst would be able to decipher this from data generated. However, a well designed and structured survey could take care of limitations that web surveys have.
Search engine marketing has various aspects. However while designing a website the following key aspects should be taken in account.
For submitting the website for search engine the following aspects must be taken into account
The other aspects that could help in search engine optimization are to study what is:
Search engine optimization can be outsourced to a third party vendor. Many software areas also available in the market which augment the process of web analytics also. However all this depends on whether traditional media is also being used to attract traffic to the website. A lot of ecommerce website might be built over products and services that are sold separately. For example an automobile manufacturer might have a string of dealerships spread across the country. He would be selling his vehicles through these dealerships.
But the customers might be logging on the website for service requests and for re-selling options or for posting their queries online. In such a scenario spending a lot of money on search engine optimization might not be relevant as the customer would have an idea of the domain name or the keywords that would help locate the website. Hence the elements of revenue model and target audience discussed in earlier sections is important with regards to search optimization.
References:
Laura Lake – How to Create a Successful Affiliate Marketing Program
Posted on about.com
Frank Fiore – Successful Affiliate Marketing: What Do Affiliates Want?
Date: Aug 20, 2001, posted on informit.com
C.J. Hayden – Five Myths of Internet Marketing for Independent Professionals
Guest article on about.com
Laura Lake – Internet Marketing Strategy: Why is it Important?
Posted on about.com
Steve Van Yoder – Marketing in a virtual world
Posted on about.com
Ana Rincon – Online Business/ Hosting
Friday November 17, 2006, Posted on about.com
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