Affiliate marketing refers to a method of advertising, selling and marketing products on-line through an affiliate program where a webmaster joins in with a merchant to sell their product. It is a highly efficient, yet cost friendly way to create both awareness and sales of a particular website, brand or product.
The affiliate (or publisher) will either display adverts, or make use of blogs, rss feeds, emails or other means to either refer to the merchant’s product, or at least provide exposure to the merchant that will benefit both parties. The benefit the affiliate receives is a commission or revenue based payment for every sale that has come through the affiliate’s website. Some, however, work on a pay-per-click system – where the affiliate receives money through every click to a site that has come through his/her website. However, the preferred way of remuneration is rather cost-per-sale, or cost per action, which means the affiliate receives remuneration for an actual sale or subscription referred from his/her site.
Affiliate marketing started just four years after the world wide web was birthed (1994) and many popular and successful e-commerce websites owe a large part of their success to the program (namely, Amazon.com and others.) Affiliate marketing, however, should not be confused with multi-level marketing, although many multi-level or network marketing companies do make use of a similar method for on-line marketing. Google’s AdSense is also not considered Affiliate Marketing (though, it is an example in some sense) because it makes use of contextual advertising.