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 market has grown in complexity, resulting in the emergence of a secondary tier of players, including affiliate management agencies, super-affiliates, and specialized third party vendors.
The industry has four core players:
- The merchant
- The network
- The publisher
- The customer
The merchant is also known as advertiser or retailer or brand, the network is contains offers for the affiliate to choose from and takes care of payments, the publisher is also known as the affiliate, then you have the customer which is the lead or prospect who buys the products and services.
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 display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
Affiliate marketing is commonly confused with referral marketing, as both forms of marketing use third parties to drive sales to the retailer. The two forms of marketing are differentiated, however, in how they drive sales, where affiliate marketing relies purely on financial motivations, while referral marketing relies more on trust and personal relationships.
Affiliate marketing is frequently overlooked by advertisers.
While search engines, e-mail, and web site syndication capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers' marketing strategies.
The added value of affiliate marketing is the fact that advertisers can collaborate with hundreds of partners, the affiliates, without engaging in direct communication with them. Therefore, the advertisers can increase their market position without a need to conduct time-consuming processes of recurring approvals and relationship building with partners.
These tasks are performed by the affiliative system operator, who establishes contact with the advertisers and with the partners and enables advertisers to benefit from the advertising capacity of partners from all around the world. From advertisers' perspective, advertising services are provided by the operator and not by each partner engaged within the affiliation system.
Analogically, the affiliates (partners) are able to provide advertising services without any interaction with advertisers since the affiliate panel gives partners access to all the necessary information needed to run an advertising campaign.
Such information includes, for example, advertising materials for each advertised product and service category, geolocation data for individual advertising campaigns for each advertised product and service category, which can be advertised in accordance with its geolocation. Additionally, the affiliate panel includes information about rates per lead generated in a campaign per geolocation. From the perspective of the partners, their services are rendered to the operator and not the advertisers.
Source: https://en.wikipedia.org/wiki/Affiliate_marketing