Definition

Affiliate marketing is the ultimate form of marketing. It is know as ‘pay-per-performance marketing’ method. This form of marketing is a commision-based arrangement where the merchant only pays when they make the sale or get a lead. It can drive a volume of business in a range of sectors. Many banks, travel companies and online retailers get more than 10% of their sales from a well-run affiliate marketing programme. It’s not so suitable though for business products or lower-priced consumer products since it will not be sufficiently profitable for the affiliates, and it may be difficult to recruit sufficient affiliates.

How does it work

When a visitor to an affiliate site (who may be an online publisher or aggregator) clicks through to a merchant site, this prospect will be tracked through a cookie placed on the visitor’s PC. If the prospect later transacts within an agreed period, usually 1, 7, 30, 60 or 90 days, the affiliate will be credited with the sale through an agreed amount (percentage of sale or fixed amount).

Affiliate marketing models

Aggregators

These are the major comparison sites like Kelkoo, USwitch and Moneysupermarket. These aren’t strictly affiliates since some, such as Kelkoo and Shopzilla charge on cost-per-click, but USwitch and MoneySupermarket have a CPA model as well. Google Product Search (formerly Froogle) uses a similar model, but is a free option for retailers to submit a feed for which products may be featured in the top of the Google SERPs.

Review sites

For example CNet software or hardware reviews, or maybe startup like Reevoo or Review Centre. These all link to merchants based on cost-per-click or cost-per-acquisition deals.

Rewards sites

These split the commission between the reward site and their visitors. Examples are Greasy Palm or QuidCo.

Voucher code sites

MyCoucherCodes or Hot UK Deals are typical. If you have some great deals to entice first-time shoppers you should generate business, although many search by well-known brands.

Bloggers

Martin Lewis’s MoneySavingExpert.com is incredibly popular site due to his PR efforts and great content. Although he has no ads, he is an affiliate for many sites he recommends.

Everyone else

They don’t tend to be high volume super-affiliates like all the above, but they are collectively important and you can work them via affiliate networks like Commission Junction or Tradedoubler. They often specialise in SEO or PPC.

Adapted from

Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation and practice (Vol. 5). Harlow: Pearson.