What is Affiliate Marketing?
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.
Merchants look to earn revenue from sale of their products or
services, pay affiliates (publishers) who want to earn revenue
from placement of product banners or text links on their site.
Merchants only pay affiliate partners for results, such as a lead or
a purchase “pay-for-performance” or other performance criteria.
Who are the Key Players?
There are three key players in any affiliate program:
1. 1. The Merchant (Advertiser)
2. The Affiliate (Publisher)
3. The Affiliate Network
Who is a Merchant
A company/organization who wants to sell their product/services
What is An Affiliate Network?
An Affiliate Network is a third party that acts as liaison between Affiliates
•Allows Affiliates to find Merchants which are suitable for their site
•Allows Merchants to find Affiliate sites that expands reach to their
•Services include tracking technology, reporting tools, payment
aggregation and processing
•Provides a creative bank or repository for storing and accessing creative
•Is no cost for an Affiliate to join
How Does Affiliate Marketing Works?
•Affiliate obtains Merchant creative from Affiliate Network and loads to their site
•Consumer visits Affiliate’s site and clicks Merchant banner
•Cookie is set on Consumer’s browser which identifies Merchant, Affiliate and link
•Consumer is directed to Merchant site
•Affiliate ID is captured by Merchant in referring URL
•Consumer makes purchase from Merchant
•Cookie information sent to Affiliate Network
•Merchant transmits sales file to Affiliate Network which includes Affiliate ID
•Affiliate Network tracks sales transactions with Affiliate ID and pays Affiliate
Top Industries in Affiliate Marketing
1. Financial Services
Affiliate Program Models
•CPC – Cost per click – The affiliate is paid for every click which he/she generate
•CPA – Cost per acquisition – The affiliate is paid a fixed amount for every
conversion which he/she generate
•CPS – Cost per sale – The affiliate is paid a certain amount of transaction value
for every transaction which he/she generate
•CPL – Cost per lead – The affiliate is paid a fixed amount for every filled up
•CPM – Cost per mille (a.k.a. Cost per thousand impression) – The affiliate is
paid for every thousand impression which he/she serve on their website/blog
•CPO – Cost per open – The affiliate is paid for every mailer opened
•CPV – Cost per Visit – The affiliate is paid for every visit/session they generate
for a website