Affiliate marketing is a form of online marketing in which a company (the merchant) pays a commission to a partner (the affiliate) when the affiliate's marketing efforts generate customers and sales for the company. The affiliate usually receives a unique tracking link or promotional material that can be used to track and measure their referrals and sales.
How does affiliate marketing work?
Affiliate marketing is based on a commission model, also known as cost-per-acquisition (CPA), in which the affiliate is paid exclusively for the results it generates. This can be, for example, the sale of a product, signing up for a newsletter or registering on a website. The main steps in affiliate marketing are:
- The partner promotes the merchant's product or service on its website or through other online marketing channels.
- Interested visitors click on the affiliate link or the ad that redirects them to the merchant's website.
- Users perform the desired action on the merchant website, such as making a purchase.
- The affiliate receives a commission for the successfully completed action.
Advantages of affiliate marketing
Affiliate marketing offers numerous benefits for both merchants and affiliates, including:
- Cost Effectiveness: Merchants pay only for actual results, minimizing the risk of inefficient marketing spend.
- Range extension: A network of affiliates can help a company expose its product or service to a larger audience.
- Performance-based marketing: Since affiliates are paid on commission, there is a great incentive to develop and implement effective marketing strategies to generate as many leads or sales as possible.
- Flexibility: Affiliates can use a variety of methods to target their audience, including content marketing, email marketing, search engine optimization (SEO), and social media marketing.
Affiliate networks and programs
To simplify the process of affiliate marketing and save both parties time and resources, many companies and affiliates use affiliate networks. These platforms act as intermediaries between merchants and affiliates and provide a central solution for managing, tracking and processing commission payments. Popular affiliate networks include AWIN, Commission Junction, and Amazon Associates.
