What Is Affiliate Marketing?

Affiliate marketing is a results-oriented program where a business pays a third party for referring new customers or visitors, usually to its online store or other website. Affiliate marketing became popular with the growth of online shopping. In the most common model of this online marketing strategy, an ecommerce business pays a commission for every sale generated from visitors who are referred by an affiliate’s website. Some businesses pay affiliates for overall referral traffic, regardless of sales.

Affiliates sometimes explicitly promote a company’s products or services on their own digital properties. Or, they can simply include links or graphical ads to a company’s preferred URLs. No matter the specific format, referring links produce affiliate marketing data and insights that marketers can then use to optimize their programs.

One of the intrinsic values of affiliate marketing is its performance-based structure. A business using affiliate marketing need only pay when it achieves the results it seeks, most often in the form of a small commission on a sale or new customer acquisition. This performance-based model is enhanced by affiliate data analytics, which businesses can use to further optimize key facets of a data-driven affiliate marketing program. These strategies include messaging, compensation plans, and audience targeting, as well as leveraging the third-party publishers and platforms the company works with as part of their affiliate marketing program.