A Complex Channel
Affiliate Marketing is a type of performance based marketing where a company compensates an affiliate partner for customers they generate through their own marketing efforts.
Affiliate marketing has been used by 81% of marketers and 84% of publishers in the United States alone.
The Parties Involved
In the affiliate eco-system, a company who is looking to acquire new customers or leads, is known as the advertiser.
An advertiser can be a company selling clothing, software, electronics, accessories, etc., or a company generating leads for their insurance, mortgage, legal or other services based business.
Affiliates, also known as publishers, are individuals or companies that promote an advertiser’s product or service in exchange for a commission. This is how they monetize their marketing efforts. These marketing efforts can include a blog, content, review, or shopping comparison website, or an affiliate who is generating traffic from paid search, email marketing, display advertising, social media presence, etc.
The most important party to both the advertiser and affiliate is the consumer.
The consumer is the one who clicks on an affiliate’s ad, reaches the advertiser’s website and makes a purchase or completes a lead, thus generating revenue for the advertiser and affiliate.
Network or Platform?
In order to facilitate the relationship between an Advertiser,
Affiliate and Consumer an Affiliate Network or Affiliate Tracking
Platform must be leveraged. The primary responsibility of these
networks or platforms is to track clicks and conversions and
attribute them to the appropriate affiliate.
This is done through the use of tracking links, cookies and
conversion pixels. In addition to the technical benefits a network
or platform provides, they are also used for media hosting,
commission payment processing, program reporting and/or other
affiliate program elements.
An ADVERTISER acquires a CONSUMER and the AFFILIATE is rewarded!
Consumer clicks on affiliate’s link
Tracking cookie is placed on consumer’s browser.
Consumer reaches the advertiser
Website, landing page, microsite or hosted form.
Consumer completes an action (purchase, subscription, lead form, etc.)
Tracking pixel is “fired” on the advertiser’s website.
Network or tracking platform logs the action
Credit is given to the appropriate affiliate.
Things to Consider
Affiliate marketing is an extremely powerful channel that should
be leveraged by every company selling a product or service. When
launched and managed correctly, it has proven to have higher
returns than virtually every other marketing channel.