what is affiliate marketing 
affiliate marketing is an advertising model in which a company compensates third party publishers to generate traffic or leads to the company s products and services the third party publishers are affiliates and the commission fee incentivizes them to find ways to promote the company understanding affiliate marketingthe internet has increased the prominence of affiliate marketing amazon amzn popularized the practice by creating an affiliate marketing program whereby websites and bloggers put links to the amazon page for a reviewed or discussed product to receive advertising fees when a purchase is made in this sense affiliate marketing is essentially a pay for performance marketing program where the act of selling is outsourced across a vast network affiliate marketing predates the internet but in the world of digital marketing analytics and cookies made it a billion dollar industry a company running an affiliate marketing program can track the links that bring in leads and through internal analytics see how many convert to sales for instance an e commerce merchant wanting to reach a wider base of internet users and shoppers may hire an affiliate an affiliate could be the owner of multiple websites or email marketing lists the more websites or email lists that an affiliate has the wider its network the hired affiliate then communicates and promotes the products offered on the e commerce platform to their network the affiliate does this by running banner and text ads posting links on its websites or emailing clientele firms use advertisements in the form of articles videos and images to draw an audience s attention to a service or product visitors who click the ads or links are redirected to the e commerce site if they purchase the product or service the e commerce merchant credits the affiliate s account with the agreed upon commission which could be 5 to 10 of the sales price examples of affiliate marketingamazon s affiliate marketing program amazon associates is one of the world s largest affiliate marketing programs 1 creators publishers and bloggers sign up to have amazon products and services shared on their websites or apps and receive compensation for the sales their sites generate amazon sets strict criteria for the sites and apps hosting its ads for example sites must not contain replicated content from another site or creator and be available to the public websites must be active with fresh content and suitable according to amazon s standards for example they must not contain obscene or offensive content promote violence or illegal acts or contain any content deemed harmful to others 2approval is contingent on a thorough review by amazon staff and meeting a qualified sales quota three within 180 days of the application if an application is rejected it will not be eligible for reconsideration once approved commissions are earned as site visitors purchase products or services from amazon 3amazon associates can earn up to 10 in commissions for qualified sales rates are fixed and based on product and program categories 1 as a bonus amazon offers special commissions on certain events etsy etsy is a global online marketplace for vintage goods and other unique items it promotes its products through various channels including affiliate marketing partners applicants must submit an online application through its affiliate program portal to qualify as an etsy affiliate marketing partner eligible candidates must be at least 18 have an active unique website have a brand identity and meet other criteria 4if approved etsy pays a commission to the affiliate for sales they procure sales resulting from their site s product promotion commission rates vary and are paid on the order price etsy sellers can be affiliates but cannot earn commissions on their products without special permission etsy declares that it has the right to terminate an agreement at any time for any reason and that it can withhold compensation for any legitimate reason 5ebay s partner network is ebay s affiliate marketing program that pays partners for sharing their personal listings outside of ebay inc ebay the affiliate earns a commission and may earn credit toward their final merchant fees 6 ebay partners can also earn commissions on other sellers items commissions are earned when a buyer bids on or immediately purchases an item within 24 hours of clicking the ebay purchase link on the affiliate s site for submitted bids the commission is paid if the buyer wins the auction within 10 days of the bid 6commission rates depend on the category of items sold and range up to 4 6 gift cards items sold by charities and special promotions are generally excluded as qualifying sales because of their low revenue streams buzzfeed is a new york based digital media company known for viral news and entertainment stories quizzes and product reviews its buzzfeed shopping segment features and reviews different partners products and services visitors can read buzzfeed s product reviews and select affiliate links to purchase buzzfeed earns a commission from each sale generated from its website types of affiliate marketingthere are three main types of affiliate marketing advantages and disadvantages of affiliate marketingaffiliate marketing can yield great rewards for the advertising company and the affiliate marketer the company benefits from low cost advertising and the creative marketing efforts of its affiliates and the affiliate benefits by earning additional income and incentives the return on investment for affiliate marketing is high as the company only pays on traffic converted to sales the cost of advertising if any is borne by the affiliate the advertising company sets the terms of an affiliate marketing program early on companies largely paid the cost per click traffic or cost per mille one thousand impressions on banner advertisements as technology evolved the focus turned to commissions on actual sales or qualified leads the early affiliate marketing programs were vulnerable to fraud because clicks could be generated by software as could impressions now most affiliate programs have strict terms and conditions for generating leads there are also certain banned methods such as installing adware or spyware that redirect all search queries for a product to an affiliate s page some affiliate marketing programs go as far as to lay out how a product or service should be discussed in the content before an affiliate link can be validated an effective affiliate marketing program requires some forethought the terms and conditions must be clearly spelled out especially if the contract agreement pays for traffic rather than sales the potential for fraud in affiliate marketing is possible unscrupulous affiliates can squat on domain names with misspellings and get a commission for the redirect they can populate online registration forms with fake or stolen information purchase adwords on search terms the company already ranks high on and so on even if the terms and conditions are clear an affiliate marketing program requires that someone monitor affiliates and enforce rules in exchange however a company can access motivated creative people to help sell their products or services to the world access to a broader marketbetter accounting of qualified leadslow cost advertisingsubject to fraudless creative controlvulnerable to theftspecial considerationsthe goal of this model is to increase sales and create a win win solution for both merchant and affiliate the system is unique profitable and is becoming increasingly popular the internet and improving technologies are making the model easier to implement companies have improved how they track and pay commissions on qualified leads being better able to track leads and sales contributes to how they can improve or better position their products those interested in pursuing affiliate marketing will benefit from understanding what s involved and its advantages and disadvantages companies seeking affiliates will benefit from properly vetting and qualifying their partners overall it is a low cost effective way of advertising products and services increasing brand awareness and expanding a consumer base 