Online affiliate marketing is an established way for marketers and brands to encourage sales, transactions, and awareness of their products via a third party partner. It is a partnership with two sides to it. The advertisers are one side, with their goals of promoting their products and the owners of the online platforms are on the other side.
The affiliate commits to promoting the advertiser’s product or service via a link or a banner ad that is placed on their websites. In exchange for this, the merchant commits to paying a certain commission to the affiliate. The amount of commission paid is dependent on the payment model that the partners have agreed upon previously. Examples of the types of payment models are based on CPA, CPC, revenue-share etc, all depending on what has been agreed in advance.
Amazon claims to have in excess of one million affiliates across the globe. Since then, various companies have made use of affiliate marketing and the field continues to increase.
An advertiser can run affiliate programs in-house, which involves finding potential affiliates, using a particular type of software and sending out payments. This however can be very time-consuming and involves a great deal of many hours. Some marketers warn that its cost-benefit analysis does not always demonstrate itself. Identifying the affiliates alone is a very difficult process. They fall into several categories and can range from a personal website to a shopping portal etc. There are no industry-wide standards that put affiliates into categories.