What is Affiliate Marketing?

Affiliate marketing is a web-based marketing practice in which a business (MERCHANT or Advertiser) rewards affiliate partners (or PUBLISHERS) for each visitor or customer directed to the Merchant’s site - which is brought about by the affiliate’s marketing efforts.  Referrals are usually generated by placing Merchant links on the affiliate’s web site, then affiliates aggressively marketing their web site, in turn referring (driving traffic to) the Merchant’s site thus earning a referral fee or commission.  To date, the affiliate marketing model has evolved to not only include web site owners but bloggers and forum activists as well. 

Affiliate marketing is also the name of the industry where a number of different types of companies and individuals are performing this form of internet marketing, including affiliate networks (i.e. Linkshare, Commission Junction, Performics and more), affiliate management companies and in-house affiliate managers, specialized 3rd party vendors, and various types of affiliates/publishers who promote the products and services of their partners. 

Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods including organic SEO, paid SEM, email marketing and banner advertising. Sometimes however, affiliates use “black hat” techniques like publishing bogust product / service reviews to promote Merchant offers. 

Affiliate Marketing is an Entrepreneurial Venture

Affiliate marketing is driven by entrepreneurs at the forefront of internet marketing. Affiliates are usually the first to take advantage of new emerging trends where established advertisers are generally not active. Affiliates primarily learn by “trial and error”, which is also why most affiliates fail before they earn significant income to become “super affiliates” who generate thousands of dollars in commissions per month.  Many compare Affiliate Marketing to offline MLM and Network Marketing.

Brief History of Affiliate Marketing

Since the beginning of Affiliate Marketing, through it’s 10+ year history, there have been many failed attempts at creating an industry organization to  provide regulations, standards and guidelines.  For now, it is a self-regulated industry.  

The only places where varying industry people come together are via online forums and/or industry trade shows. The online forums are free and anonymous where even small affiliates can have a big voice. Trade shows are not anonymous, but most affiliates are not able to attend those events for financial reasons.  

CPA Networks vs. the Affiliate Model 

Most recently, there has been a threat to the traditional Affiliate Marketing model by CPA Networks (CPA= Cost Per Action) such as AzoogleAds or Hydra Network. Traditional affiliate marketing involves significant resource allocation and requires a lot of maintenance including the management, monitoring and support of affiliates. CPA Networks on the other hand eliminate the need for the Merchant / Advertiser to build and maintain relationships with affiliates, because that task is performed by the CPA Network for the Advertiser, who simply puts an offer out, which is in almost every case a CPA based offer.  From there, the CPA Networks take care of the rest by mobilizing their affiliates to promote specified offer. CPS or Revenue Share offers are rarely found at CPA Networks, which is the main compensation model of classic affiliate marketing.