We’ve all heard the stories: anyone can make millions online, just by throwing up a site and putting a few ads on there…right?

Well, not exactly. I hate to break it to you, but striking it rich online without any effort at all is tantamount to winning the lottery. That said, you CAN make money online if you work diligently over time. This intro to affiliate marketing is the first step in the process towards financial freedom.

What is Affiliate Marketing?

The first step to becoming a successful online marketer is to understand the tools and techniques that you have at your disposal.

Affiliate marketing is one of many ways to earn money online. It is an effective, but by no means exclusive method for monetizing your website traffic.

Connecting Supply and Demand

The basics are actually quite simple. Affiliate marketing, like any business, is based on the core principles of supply and demand.

Group 1: People like you. More than a third of the world population is online. That’s over 2 billion people, and growing everyday. Not only that, but the average time spent online per person continues to increase at a staggering rate.

Group 2: Millions of companies and individuals have developed products and services to sell online, from the household names like Amazon, to the individual in his garage with a new SaaS (software as a service) startup.

Users want to find products and services they need, and businesses want to find quality customers. Your job as an affiliate marketer is to connect the two.

Affiliate marketers connect businesses to customers by using specific, targeted links.

Businesses Will Pay for Targeted Traffic

Traffic (potential customers, users, eyeballs, whatever you want to call it) is valuable, and businesses are willing to pay marketers to get targeted, relevant users to their sites.

There are tons of ways in which businesses pay for customer attention. Whether it’s a billboard on the side of the highway (CPM – cost per mil, pay per impression in internet lingo), a Google AdWords campaign (PPC – or pay per click) or an affiliate program (pay per conversions), relevant traffic = $$$.

So, affiliate marketing is pay per conversion. That means that if you drive one of your website users to another company’s website, and that users ends up purchasing a product or service from that site, you get a commission.

Why It’s Profitable

By now you’re probably thinking: “Yeah, I get it, but how does that turn into money in my pocket? If businesses pay for this, why aren’t other people already doing it?”

Well, the truth is, other people are already doing it, but that doesn’t really matter.

The amazing thing about the internet is it lets everyone being extremely specific about what they want. This shows up in the form of search terms (keywords) and is commonly known as the long-tail effect. With the long-tail effect, you can drive traffic to a website based on interests that only a few people are looking for (aka: niche). Businesses don’t have the resources to individually target all of these people, but they will pay you to generate that traffic for you.

How To Earn Money

It really is that simple:

  1. Create a website targeting a specific group of people (niche).
  2. Provide interesting content for that niche.
  3. Link to products your niche is interested in.Now, don’t go dreaming of wealth overnight, but the reality is with time and effort anyone can create a constructive, powerful affiliate marketing site.

If you’re just getting started, be sure to check out the top affiliate programs beginners need to know about or learn about what to look for in the best affiliate sites.