Updated
Affiliate marketing is a performance-based partnership: a company (the merchant) pays partners (affiliates) a commission for every sale, lead or other action they bring. Affiliates are often bloggers, comparison sites, coupon portals, influencers or niche websites.
How it works
Each affiliate gets a unique tracking link. When a visitor clicks it and buys, the affiliate network or tracking software attributes the sale to that partner, and the merchant pays the agreed commission.
Common commission models
- CPS: a percentage of the sale, the most common model for online stores.
- CPL: a fixed amount per lead, for example a form submission.
- CPA: a fee per defined action, see CPA.
Pros and cons
You only pay for results, and partners can reach audiences you would not reach yourself. On the other hand, you need to watch out for low quality traffic, coupon sites that take credit for sales that would have happened anyway, and overlaps with your own PPC campaigns on brand terms.
Tips
Set clear rules for bidding on your brand, check returns before paying commission and compare the true cost per order with other channels.
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