Affiliate Marketing In India : What, Why and How

Have you heard about Affiliate marketing? If you have and are just starting out being an affiliate in India, this post will give you a complete overview of affiliate marketing landscape in India.

But first, let us understand what is Affiliate Marketing – The business of marketing third party products on your website, and being recompensed for each purchase, sale, click or revenue generated by visitors who have reached the Seller through your advertisements, vouchers or other incentives on your website, is generally known as ‘Affiliate Marketing’.

Who Offers Affiliate Marketing in India?

Since it is a low risk and high reward marketing and sales strategy, Affiliate Marketing has found many takers in India. These can be broadly divided into two categories – ‘Affiliate Networks’ and ‘Affiliate Marketers’ or ‘Publishers’. Some of the entities functioning as an Affiliate Networks in the Indian market are:

• Tyroo Media Pvt Ltd
• OMG Network
• Vcommission
• Payoom
• Komli Media
• DGM
• Trootrac
• Ibibo Ads

Some of the Affiliate Marketers or Publishers prominent in India are as under:

• CouponzGuru
• Pennyful
• CouponDunia
• Groupon
• Cashkaro
• Mydala
• Couponraja
• and many more…

How is Affiliate Marketing done?

Merchants assign a fixed commission to the ‘link’ or ‘banner’ of the products that they offer online. The affiliates understand the terms they are offered and publish the link or banner on their website, blog etc. and the link tracks all the traffic and sales generated through each affiliate as the link/ URL given to each affiliate is unique.

1.) Affiliate Networks offer services for facilitating affiliate marketing. They provide a network for ‘Advertisers’ / merchants as well as ‘Publishers’ / marketers.

Below are the different ways they function:

• When a customer clicks on the link available on an affiliate’s website, a cookie is set on the visitor’s browser that identifies the advertiser, the publisher, and the specific link and payment rates. When the visitor makes an actual purchase online or fills out a form, that transaction is tracked and recorded by concerned network. After recording the transaction, it handles all of the collection and processing required to ensure fair and timely commission payment for the publisher, and all of the administration and verification necessary to ensure quality sales and leads for the advertiser.

Here the cookie is active for 30 days, therefore in the event that the visitor goes to the merchant’s website within 30 days of first activating the cookie, the affiliate will get paid for any sale (and multiple sales) occurring within those 30 days.

• Some affiliate networks use a combination of html ‘end of sale’ code (which is placed in your shopping cart or on your ‘order confirmation’/’thank you’ page) and cookies (which are created on the customers PC after they click on one of your advertisements) to track sales. This ‘two key’ combination ensures that network will ONLY track the sales that are sent to you from that network’s affiliates. Cookies are deleted once a transaction occurs or typically expire within ninety days. The life of the cookie can be set to 45, 60, 90, 120, 150 days, 1 year, 2 year or indefinitely.

Affiliate marketers or Publishers operate in the following manner:

• Sites like CouponzGuru, Pennyful, CouponsDuniya and Cashkaro, as the same suggests, provide coupons to customers and cash back options that may be used while making a purchase on any merchant site, having reached the said merchant site after perusing and clicking on the relevant coupon/ offer at the above-noted affiliate websites.
• There are others like Groupon and mydala which offer coupons and discounts at offline entities like restaurants, gyms, grocery stores, health and beauty stores in addition to the online deals at ecommerce merchant sites.

2.) Ecommerce portals in India are offering their own affiliate programs also, such as Flipkart, Jabong, Snapdeal Amazon Associates and so on offer their respective affiliates up to 15% for each successful referral (which ends in purchase). Websites can place banners or links re-directing visitors to products on these sites.

The criterion for payment of commission to affiliates is usually as under

• CPM or ‘Cost per 1000 impressions’ – This is the value paid by the merchant to the affiliate for every 1000 page views of text, banner, images.
• CPS or ‘Cost per sale’ – This is the amount paid by the merchant to the affiliate on an actual purchase/ transaction made by the visitor.
• CPL or ‘Cost per lead’ – The amount paid by the merchant to the affiliate when a visitor leaves personal information such as name, email ID etc., allowing the merchant to get in touch with such visitor.
• CPC or ‘Cost per click’ – The value paid by the merchant to the affiliate for each click on the advertisement, text, banner.
• CPA or ‘Cost per acquisition’ – The value paid by the merchant for an action, such as filing up a form, signing up for something etc.

What are its Drawbacks

Although not probable, but suffering at the hands of Affiliate marketing is always a possibility. Certain issues that may crop up while engaging in affiliate marketing are:

• Affiliates can indulge in misleading the number of visitors / clicks etc. in an attempt to get higher commissions from merchants.
• An Affiliate may offer discounts and offers on a product or service which is entirely untrue or exaggerated to the extent of being impossible to deliver, which may lead to loss of customers for the merchant.
• Merchants may promise high commission in the beginning, only to reduce the commission rates or percentages with time.
• Link hijackers may hijack affiliate links and direct the payment of commission to themselves.
• Merchants may suffer a gradual decline in profits, as consumers who would have visited their website directly may only now shop/ purview their products through the affiliate’s website, meaning thereby that what would have been a direct sale, becomes a sale for which the merchant will now have to pay a commission.

Scope in India?

Although it may be at its nascent stages in India, the advantages of affiliate marketing, its low cost and high benefit for both merchants and affiliates, the slowly growing number of service providers offering their expertise for setting up affiliate marketing programs, software and network, increase in internet penetration in India, the growing craze and convenience of ecommerce companies – all factors go to show that Affiliate Marketing (when embarked upon after carrying out due diligence by both merchants and affiliates) will only earn more beneficiaries with the time to come.

Author’s View

Affiliate Marketing is the most cost effective and viral channel of marketing for E-Commerce companies. They just pay for the transactions that the affiliates brings, unlike other channels where they need to pay for each view or click irrespective of the transactions.

Above all, advertisers indirectly get a lot of exposure to the affiliate’s marketing activities at various channels as affiliates pushing the advertiser’s content to generate more sales. Also each affiliate has his / her own set of ideas and thus I call affiliate marketing as one most effective “crowd” sourced method of marketing.

[box type=”shadow” ]About the Author: Vikash is an engineer turned entrepreneur and is the founder of CouponzGuru.com, which is a leading coupons and deals website in India. He has worked as Business Analyst in IT for 5 years, before taking up his passion for Internet Marketing full time.[/box]