Affiliate Advertising

Product Nomenclature

Affiliate advertising is a performance-based marketing model where businesses pay third-party partners, known as affiliates, for driving traffic or sales through referral links. It is a popular strategy for e-commerce brands to expand their reach without upfront advertising costs. What You Should Know Affiliate advertising typically involves three key participants:

Advertiser (Merchant): The brand offering products or services.
Affiliate (Publisher): The promoter, which can be influencers, bloggers, or review sites.
Affiliate Network: The platform that tracks sales and manages payments.

Common payment structures include:

Pay-Per-Sale (PPS): The affiliate earns a commission for each sale.
Pay-Per-Lead (PPL): Payment is made for generating leads, such as email sign-ups.
Pay-Per-Click (PPC): Affiliates earn based on clicks, regardless of conversion.

Affiliate platforms such as ShareASale, Amazon Associates, and Rakuten track conversions using unique referral links and cookies. How It Works Advertisers create an affiliate program with commission structures and promotional materials. Affiliates promote the brand through their channels—such as blogs, social media, or YouTube—using unique tracking links. When a user clicks the link and completes a purchase, the affiliate earns a commission. For example, a beauty influencer promoting a skincare brand on Instagram may include an affiliate link in their bio, earning a percentage from every sale made through that link. Advantages

Cost-Effective Marketing: Advertisers pay only for actual conversions.
Expands Reach: Leverages affiliates’ audiences to promote products.
Boosts SEO: Affiliate content often generates backlinks and increases search visibility.
Drives Conversions: Affiliates with loyal followings drive high-intent traffic.

Applications and Use Cases A fitness supplement brand partners with fitness influencers who promote their products using affiliate links on YouTube and TikTok. An online fashion retailer uses an affiliate network to recruit bloggers who create shopping guides with referral links. A travel booking site partners with influencers to promote vacation packages and pays commissions for each completed booking through their affiliate links.

Affiliate Advertising

Share

More glossary entries

Attribution Modeling

Advantage+

Ad Viewability

Enter the new era of marketing