What is affiliate marketing?

Easily explained, affiliate marketing is a strategy that enables individuals to make money by referring consumers to an online store. Affiliates receive a commission when their marketing efforts result in a transaction. Advertisers on the other hand, receive high quality traffic and pay only for results. Affiliate networks offer a platform to connect advertisers and affiliates, and handle support, tracking and payments.

Affiliate marketing is often referred to as performance based marketing, with CPO (cost per order) being the payment model. This means that when an affiliate contributes with a transaction on the advertisers website, the affiliate gets paid a commission. As of this, it becomes a cost per order for the advertiser.

What is an affiliate?

An affiliate is an individual or a company which sends readers, followers and visitors to an online advertiser. In practice, any individual with an online channel and audience can be an affiliate. Typical affiliate channels are websites, blogs, social media channels, price comparison sites, shopping sites, cashback and loyalty concepts, email marketers, voucher sites and content sites.

What is an advertiser?

From an affiliate perspective, an advertiser is a business connected to an affiliate network. In principal, any business with a website at which users can make a transaction can be an advertiser. However, with affiliate marketing being performance based, affiliates tend to choose to promote well known brands that are likely to convert, rather than smaller brands. Put differently, being an established and well renowned business can positively affect the success of an affiliate program.

What is an affiliate program?

The advertiser has an affiliate program which allows affiliates to retrieve tracking links. The affiliate program is administered by an affiliate network, and enables the affiliate network to track clicks and transactions that originate from the website or channel of an affiliate.

What is an affiliate network?

An affiliate network commonly serves as the link between advertisers and affiliates. The network offers a solution for tracking conversions, while handling support and payments. Affiliate networks are specialized in the field of affiliate marketing, and help advertisers to set up successful affiliate programs that are attractive for affiliates to promote.

Conclusion

Affiliate marketing is a digital marketing strategy that facilitates the connection of advertisers and relevant affiliates. The payment model is often referred to as CPO, meaning the affiliate gets paid when he or she contributes with a sale to the advertiser. The advertiser, on the other hand, pays only when a transaction or an agreed upon event has occurred.

The above post provided you with basic knowledge of what affiliate marketing is. Interested in learning more? Check out our whitepaper on how affiliate marketing works.

Did this answer your question?