I always hear other affiliate marketers talking about how you can just direct link to the product landing page through Google, but I'm not sure what they mean by this. Isn't it against TOS if you just redirect your URL? Someone please help clarify... thank you.
This will help you http://adwords.google.com/support/bin/answer.py?answer=45068&query=affiliates&topic=&type=f&onClick= Direct linking means, putting your Clickbank hoplink as a destination url.
to make things easy to understand.. do the following go to the hoplink or address that the affiliate program gives you. Where ever you end up at, that will be your display url. You don't have to use the http://www just use the domainname.com. some people like to use a /keyword or keyword.domainname.com destination url is the affiliate link you are given by whomever.. this is more than likely a redirect url. you will get confused by googles help pages, because they say they don't allow redirect. But they are talking about something else, not redirects that land on the display url. Here's that catch, if another affiliate is promoting the same product, the person with the highest rank will have thier ad shown. Which translates to you bidding a lot more than you are probably willing to lose. If the company itself that you are competing against is bidding on the same keyword, they "might" have a high bid of 100 bucks. This way they pretty much own the keyword at that point. Move onto a different keyword. Now your only goal is to find a keyword that has low demand, good luck with that. Or to avoid all this, create your own landing page. That way you don't have to compete with the display url's, and your cpc will be much lower, but your ad might not be seen as much.
I heard that I can buy a domain name and then redirect it to a merchant landing page through affiliate link but it is allowed only in content network. I am totally confused what is allowed and what is not. Any thoughts regarding this?
if you're doing adwords, the problem will be that fact your display url and destination url must be the same, and stick. You might advertise for the same display / destination, but it would not be smart to redirect off the destination to the real landing page.