Affiliate programs have quickly taken the Internet by storm. Companies large and small have embraced this approach to mass marketing. Essentially, you provide support material to educate affiliates and assist them with web-based marketing. Your affiliates, in turn, post your materials on their sites and provide customized links back to your web site. When a visitor clicks on a link, they jump to your site, and your site attempts to close the sale. When you make a sale, you pay the participating affiliate a commission.

Obviously, there is very little cost to an affiliate program other than establishing the initial software infrastructure. You can purchase affiliate program management software or you can outsource and rent a management system.

Many people initially believe it is less costly to purchase a system and manage it themselves, but they soon discover it can be a great deal of work. For smaller companies, this can become a considerable challenge. For larger companies with dedicated staff, this may present no problem at all.

Certainly renting or leasing a system through an outsource arrangement can have considerable benefits. In a sense, the system works by itself with very little effort on your part. Over time, the cost of the system may, in fact, be more costly than purchasing a system of your own; however, one has to consider the cost of maintaining and supporting such a system over the long term.

Some systems allow you to track only one level of affiliates while others allow multiple levels of affiliates, thereby encouraging your webmasters to promote not just your products and services but also your program itself. For those webmasters with established MLM-like downlines, turning on another affiliate program across their downline is relatively easy -- and very beneficial to you. So when considering a tracking system, look for a system that allows multiple levels of affiliates.

The key element is not whether you own or outsource, but more importantly, how aggressively you support your affiliates. Due to the increasing popularity of affiliate programs, the majority of webmasters sign up for every program that crosses their path. This strategy rarely works, and the old 80/20 rule will ring true here as it does elsewhere. Only those webmasters whose web sites fit the demographics of your potential customers will actually position themselves for effective sales opportunities.

Many companies support their affiliates regularly through email and ezines sent monthly, weekly or even daily (a major chore but offers great returns on your investment). To get an idea of how other companies manage their programs, you should join a few and take vigorous notes.

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