Why use affiliates, rather than search engine traffic?
Introduction.
Suppose you run a web site selling a product, successfully. Your site gets a large amount of well-targeted search engine traffic. Given the site is receiving targeted search engine traffic, why start an affiliate program?
Reach.
With one website, people find the one listing in the search engine. With a good affiliate program, think of thousands of sites. All, potentially, are positioned in the search results. These are more opportunities to increase sales.
Credibility.
Keep in mind, only a small percentage of affiliates actually produce sales. Those who do, potentially do so very very well.
The very best affiliates do more than simply slap up a banner ad and expect profits to roll in. They bring pre-qualified visitors, via personally written recommendations or reviews. Many, "super" affiliates, already have a loyal audience. These targeted referrals are invaluable.
Consider this. A visitor, from the search engines, doesn't know you from uncle. They are likely to be wary, when visiting your sales page. Affiliates, in contrast, are like a referral.
The "real" benefactor.
The merchant, in many ways, has more to gain from affiliate marketing, than the affiliate. The affiliate gets a commission, for a one-time sale. Sometimes it is more than once, from the same customer, if there's a cookie. However, the merchant acquires a customer.
The affiliate has to hope the customer returns to the affiliate's site, after the cookie expires. More often than not, however, the affiliate relies on a parade of new customers.
The merchant then markets directly, and repeatedly, to affiliate referred customers. They are already familiar with the merchant's site and offerings. Therein dwells the cash cow.
Customer acquisition is one of the toughest steps in the process of internet marketing. Having a core of effective affiliates, working for you, helps overcome this hurdle.
This works only if the merchant is dedicated to treating the affiliate as a true partner, in the venture. Good compensation, long cookies, support and communication from an affiliate manager, timely payment, incentives, etc. go a long way toward making it a success.
Conclusion.
Remember, only a small percentage of affiliates will be truly productive. They, alone, provide a rocket boost to your business, if you treat them right.