Google Ad Words is the name of the pay per click advertising
program which allows affiliates, and other merchants, to advertise
on Google and other sites in the Google network.
The program works by setting up a system in which the advertiser
pays every time a visitor clicks on his ads.
Since the advertiser can select his bid amount, he is in effect
controlling the amount of money he is spending to bring those
visitors to his site.
You might wonder why every merchant doesn’t simply bid
the minimum amount so that they can keep their ad costs to a
Since the ads are shown in order of the highest bids first the
advertiser with the highest bid will generally receive the most
Affiliates can utilize the Google Ad Words program to advertise
their affiliate sites.
For this to work the affiliate would need to know how many visitors
he needs to bring to the merchants site to obtain a sale.
He must then divide his commission by the number of visitors
and he will know his breakeven point.
The affiliate would then want to bid below this amount for his
So if 100 visitors will produce a sale for the affiliate, and
that sale produces a $25 commission, then the affiliate needs
to spend under .25 per visitor to be profitable.
There are other pay per click search engines which affiliates
can use to promote their affiliate sales.
Yahoo has recently started a similar program which can allow
advertisers to promote their affiliate links by bidding for
To make sure that the affiliate stays ahead of the game he needs
to monitor the results of his advertising.