Affiliate marketing

Definition of affiliate marketing

Affiliate marketing is a performance-based marketing strategy where businesses reward affiliates for driving traffic, leads, or sales to the business through the affiliate's marketing efforts. Affiliates earn a commission based on the agreed-upon terms.

More about affiliate marketing

When a customer clicks on an affiliate's unique link and completes a purchase or takes a desired action (such as signing up for a newsletter or requesting a quote), the affiliate earns a commission.The commission structure can vary widely, ranging from a percentage of the sale price to a fixed fee per lead or action. This performance-based model ensures that affiliates are only rewarded when their marketing efforts result in tangible business outcomes for the merchant. 

Key players in affiliate marketing

• The merchant (also known as the advertiser or brand): the business that owns the product or service being promoted.
• The affiliate (also known as the publisher): the individual or company that promotes the merchant's product or service.
• The customer: the end consumer who ultimately makes a purchase or takes a desired action.

The affiliate marketing process

1. The affiliate selects products or services to promote, often based on their niche, audience, or personal interest.
2. They use various marketing channels, such as blogs, social media, email marketing, or paid advertising, to promote those products or services to their target audience.
3. Each affiliate is typically given a unique tracking link that allows the merchant to track the traffic, leads, or sales generated by the affiliate's marketing efforts.

Advantages for merchants and affiliates

• For merchants: a cost-effective way to acquire new customers and increase sales without having to pay upfront advertising costs.
• For affiliates: a flexible and potentially lucrative way to earn income by leveraging their existing audience and marketing skills.

Related terms

• Affiliate program
• Merchant
• Commission structure
• Performance marketing