What is Affiliate Marketing? (START HERE)

What is affiliate marketing?

Affiliate Marketing is the process of promoting someone else’s product or service in return for a commission or payout.

It’s a type of performance-based marketing that allows companies and merchants to reach wider audiences, thereby increasing sales and customer base. There are a number of different forms of affiliate marketing but the results are always the same. Affiliate marketing practices are often referred to as affiliate programs or affiliate offers. However, there are several different affiliate marketing pricing models and formats.

The affiliate marketing industry can be split into four key players:

The Merchant/Advertiser

The merchant or affiliate offer owner who creates the affiliate program or offer to promote whatever service or product, often referred to as the advertiser. Affiliate marketing is a great way for merchants to get their business promoted by other people. Merchant pay for results driven back to their business.

Affiliate Network

The affiliate network, often the middle man who provides the offers and programs from the merchants to the affiliates. The intermediary between the merchants and the publishers. They handle all payments, tracking and support to the publisher.

Publisher/Affiliate

The publisher (affiliate) whose role it is to take the offer or program and drive results to it by converting prospects into potential customers. They have the choice to work with an affiliate network or to go to the merchant or advertiser directly. It's their job to connect the offers and programs with the users or customers.

Customer

The customer or end-user who takes action on the offer or program, which results in the publisher, network and merchant being paid. The customer is your everyday user who's browsing the internet often unknowing they are converting an affiliate marketing program when they perform an online action.

Typically speaking, the advertisers or merchant will only pay when a chosen action is executed, hence the popularity of affiliate marketing by direct response advertisers. This could be a sign up, a purchase or something as simple as a view or click. A successful completion of an affiliate offer is often referred to as a conversion or lead.

A pixel is inserted into the offer page and is fired as soon as a specified action is fulfilled, thus resulting in a successful conversion. The front end of the offer is what a person would see if they visited it online, for example the website or landing page. Merchants’ payouts will differ. Some choose to pay per conversion whereas others will pay a commission or referral fee. It all depends on the merchants pricing model.

Typically a merchant or offer owner will partner with an affiliate network to find affiliates to promote their program. However, sometimes they will exclude the middle man and connect directly with the publisher. The benefit of using an affiliate network is that they normally have a vast database of proven affiliates and will also handle payments and processing. In return, the network will take a percentage of the offer payout or commission.

Affiliate marketing is all about numbers and you are deemed successful on your profitability.

Next: What is an affiliate network?

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