Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts. The industry has four core players: the merchant (also known as ‘retailer’ or ‘brand’), the network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as ‘the affiliate’), and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors. Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC – Pay Per Click), e-mail marketing, content marketing, and (in some sense) display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner. Affiliates are paid either by the merchants or the network, depending on the agreement. Affiliate marketing has grown quickly since its inception. The e-commerce website, viewed as a marketing toy in the early days of the Internet, became an integrated part of the overall business plan and in some cases grew to a bigger business than the existing offline business. According to one report, the total sales amount generated through affiliate networks in 2006 was £2.16 billion in the United Kingdom alone. The estimates were £1.35 billion in sales in 2005. MarketingSherpa’s research team estimated that, in 2006, affiliates worldwide earned $6.5 billion in bounty and commissions from a variety of sources in retail, personal finance, gaming and gambling, travel, telecom, education, publishing, and forms of lead generation other than contextual advertising programs.
Affiliate marketing is a powerful tool for businesses of all sizes. It allows them to reach a larger audience, increase their sales, and build relationships with customers. Affiliate marketing is a cost-effective way to promote products and services, as it requires minimal investment and can be scaled up quickly. It also allows businesses to track their performance and measure the success of their campaigns. Affiliate marketing is a great way to reach new customers, as it allows businesses to target specific audiences and tailor their campaigns to their needs. Additionally, it can be used to build relationships with existing customers, as affiliates can provide valuable feedback and insights into customer behaviour. Affiliate marketing can also be used to increase brand awareness, as affiliates can help to spread the word about a business and its products or services. Finally, affiliate marketing can be used to generate revenue, as businesses can pay affiliates for each sale they generate.
