Affiliate marketing is a channel in which an advertiser pays a commission to a partner (publisher), for a performance-driven action, or conversion event. At its most basic, it works as follows: An advertiser, brand or retailer that wants to reach a larger audience can work with a partner to promote their products or services. The partner highlights and promotes the products or services via a tracking link such as product ads, text links or banners. The tracking link is embedded in the website or mobile app content, or it can be embedded in other marketing vehicles such as emails, social posts, newsletters, search ads or retargeting messages that reach the consumer.
A reader or consumer then clicks on one of the tracking links and is directed to the advertiser’s site. If the consumer completes an action, like a purchase, submits a qualified lead or downloads a mobile app, the partner receives a commission for that action. Note that in practice, advertisers generally work with more than one partner to get the maximum amount of exposure, provided they’re the right partner for that brand (but more on that later).
It is through this method that affiliate marketing has generated billions of dollars in sales. It has also made it possible for a wide variety of partners—from kids reviewing toys to news publications providing information to social media influencers offering product reviews—to make a significant income without ever having to actually own or distribute the inventory or facilitate the ecommerce transaction. Download A Guide to Affiliate Marketing to learn a brief history of affiliate marketing and important points to keep in mind in relation to affiliate services providers. You can also take a closer look at what’s really happening in the industry and benefit from some statistical takeaways to provide an accurate picture of how affiliate marketing is developing and what’s to come.