Affiliate marketing is a form of online marketing where businesses (merchants) promote their products or services through partners (affiliates). Affiliates earn a commission when a specific action (like a purchase, signup, or click) is completed as a result of their promotion. It’s a performance-based model that benefits both merchants and affiliates.
How does affiliate marketing work?
- Merchant (Advertiser): The company offering products or services and seeking promotion through affiliate partnerships.
- Affiliate (Publisher): The individual or organization promoting the merchant's products, often via websites, blogs, social media, or email campaigns.
- Affiliate Network (optional): A platform that connects affiliates and merchants, provides tracking tools, and manages commission payouts (e.g., Awin, CJ Affiliate).
- Customers: End users who are directed to the merchant's website and perform the desired action.
Process:
- The merchant provides affiliates with special links (affiliate links) or promotional materials (banners, text ads).
- Affiliates place these links on their platforms.
- Customers click on the affiliate links, leading them to the merchant’s website.
- Tracking technologies (cookies, tracking IDs) monitor whether the desired action is completed.
- Affiliates earn a commission based on the agreed payment model.
Commission Models:
- Pay-per-Click (PPC): Commission for each click on the affiliate link.
- Pay-per-Sale (PPS): Commission for each successful sale.
- Pay-per-Lead (PPL): Commission for generating leads (e.g., signups or registrations).
Benefits:
- For merchants: Low risk, as payment is based on results.
- For affiliates: Opportunity to earn passive income.
- Scalable and accessible globally.
