In simple terms, affiliate marketing is selling someone else’s products or services and then in return, you receiving a commission for doing so. Affiliate marketing is used by many businesses to reach a larger audience, increase their sales and customer base. It is an efficient way for companies to reach a large number of people (affiliates) to advertise, promote and sell their products and services in return for a small commission.
Affiliate marketing at its very core is about relationships, a relationship between three parties:
- Advertiser: the advertiser can be a company selling a product like electronics or airline tickets, or an advertiser could also be an insurance company selling their policies. The most important thing to remember is that you are an advertiser if you are ready to pay other people to help you sell and promote your business.
- Publisher: is an individual or company that promotes an advertiser’s product or service in exchange for earning a commission. Advertisers contractually agree to work with a publisher, then provide the publisher with creative – in the form of links, banner or text ads or even unique phone numbers – that the publisher incorporates into their website.
- Consumer: The final component that completes the affiliate relationship triangle is the consumer. The consumer is the one who actually sees the advert and then acts upon it. They will be taken from the publisher’s website to the advertiser’s to complete the action, whether that is purchasing a product or completing a lead; either way when this is complete we call it a conversion.
Recommended further reading on affiliate marketing: