Background to Affiliate marketing

Affiliate marketing is an Internet-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts.

Affiliate marketing is also the name of the industry where a number of different types of companies and individuals are performing this form of Internet marketing, including affiliate networks, affiliate management companies, and in-house affiliate managers, specialized third party vendors, and various types of affiliates/publishers who promote the products and services of their partners.

Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization, paid search engine marketing, e-mail marketing, and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.

Affiliate marketing-using one website to drive traffic to another-is a form of online marketing, which is frequently overlooked by advertisers.[citation needed] While search engines, e-mail, and website syndication capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers’ marketing strategies.

Implementation options

Some merchants run their own (i.e., in-house) affiliate programs using popular software while others use third-party services provided by intermediaries to track traffic or sales that are referred from affiliates (see outsourced program management). Merchants can choose from two different types of affiliate management solutions: standalone software or hosted services, typically called affiliate networks. Payouts to affiliates or publishers are either made by the networks on behalf of the merchant, by the network, consolidated across all merchants where the publisher has a relationship with and earned commissions or directly by the merchant itself.

Web 2.0 Impact

Websites and services based on Web 2.0 concepts-blogging and interactive online communities, for example-have impacted the affiliate marketing world as well. The new media allowed merchants to become closer to their affiliates and improved the communication between them.[9][10]

New developments have made it more difficult for unscrupulous affiliates to make money. Emerging black sheep are detected and made known to the affiliate marketing community with much greater speed and efficiency.

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