Affiliate advertising is generally CPA (or Cost per Acquisition/Action) advertising. Basically it means this: as the advertiser you only pay when something happens because of your ad on somebody else's site.
This advertising model was pioneered by Amazon.com and is a large part of their success. Basically, it works like this. When you sign up to become an Amazon.com affiliate you agree to run their banners on your web site. If somebody sees their banner on your site, clicks on it, then goes to Amazon.com and purchases something, you then get paid a 5% commission.
You can immediately see the attraction to this type of affiliate advertising if you are the one getting the advertising. Let's say a site put up an Amazon.com banner under a CPM model and it only generated one sale after 50,000 impressions. If it was a $5 CPM deal, it would have cost Amazon.com $250 to get that sale.
Now, let's say it was a CPC deal and that Amazon.com got 50,000 impressions but only 500 clicks. Well, if the deal was for 10 cents a click, that one sale would have cost Amazon.com $50.
Now let's look at the sale using the affiliate advertising model. Let's say it was a sale for $50 worth of books, well Amazon.com only paid out 5% of that ($2.50) to make that sale. Not a bad deal for them.
Switching gears for a second, this isn't to say that you can't make good money as the owner of a web site whose business model is based on affiliate commissions. There are Amazon.com affiliates who make thousands of dollars a month.
But, from an advertiser's point of view, it's hard to beat free affiliate advertising. There are three main affiliate programs you can go through (that is, three sites you can sign up with to be an affiliate advertiser and get other people to run your banners on their sites on a CPA basis.).
The two best known are Commission Junction and LinkShare. However, these programs cost thousands of dollars in start-up costs to join PLUS thousands of dollars in monthly fees to maintain. Probably out of your reach if you're just starting out.
However, the third program, Share A Sale, only costs $150 to join. That's a great deal. Basically you can sign up for Share A Sale and within a few weeks have dozens, if not hundreds, of web sites running your banner ads on a CPA basis. That is an extremely powerful advertising channel.
If you take all the information in this course to heart and do start your own web business, we recommend you sign up with Share A Sale to promote it.