What is Affiliate Marketing?

Affiliate marketing is a way for businesses to generate sales, leads or brand exposure online by receiving web traffic from third-party websites (‘publishers’ or ‘affiliates’).

Affiliates attract visitors to their own sites through advertising, promotion and offering valuable content. They then direct their visitors towards the merchant’s site in return for a commission. In effect, the merchant subcontracts the role of attracting web visitors to the affiliate.

Some typical affiliate types include product comparison sites (aggregators), product review sites, sites on particular niches or interests, loyalty/reward sites and online directories. Some affiliates use email or pay-per-click advertising to generate traffic. Unlike traditional advertising, most affiliate marketing works on a CPA (cost-per-acquisition) basis, with affiliates receiving a reward for each validated sale that they generate for the merchant.

Originally, merchants had to contact affiliates directly to promote their products, while affiliates had to seek out merchants to work with. An affiliate network acts as an intermediary, bringing together large numbers of merchants and affiliates in one place. This means merchants can reach the widest possible target audience, while affiliates can access suitable affiliate programmes.

Networks offer tracking software so merchants can monitor the success of their programmes, streamlined application processes for affiliates who want to join a programme and other benefits. In return this added value, affiliate networks receive a percentage of the commission paid by merchants to affiliates.