What Is Affiliate Marketing?
Affiliate marketing is a performance-based marketing strategy where affiliates (individuals or publishers) earn commissions for driving traffic, leads, or sales to a merchant’s products or services.WikipediaInvestopedia
The Four Key Players
- Affiliate (Publisher): The individual promoting the product.
- Merchant (Advertiser): The business or brand selling the product.
- Affiliate Network (optional): A platform that connects affiliates with merchants and handles tracking, reporting, and payouts.CourseraEmeritus Online Courses
- Customer: The person who makes the purchase via the affiliate’s link.CourseraCashfree
The Process
- Affiliate registers for a program and receives a unique tracking link.PunithEDUCBA
- That link uses cookies and referral codes to track the visitor and attribute conversions back to the affiliate—even if the purchase happens later.Punith
- When a customer clicks the link and completes the defined action (purchase, signup, etc.), the affiliate receives compensation based on the agreed model.ShopifyHubSpot Blog
Common Compensation Models
- Pay-Per-Sale (PPS): Commission earned only when a sale occurs; the most common model (~80%).WikipediaShopify
- Pay-Per-Action (PPA) / Cost-Per-Action (CPA): Earned when a specific action occurs (e.g., form fill, download).Shopify
- Pay-Per-Click (PPC): Affiliate earns for clicks on the link—rare due to low-risk, low-reward.ShopifyHubSpot Blog
- CPM (Cost-Per-Mille): Earned per thousand views—rare and typically related to display ads.Wikipedia
Why It Works
- Merchants: Only pay for actual results—traffic or sales—making it cost-effective.WikipediaFiverr.com
- Affiliates: Enjoy low startup costs, flexibility, and scalable income potential.SalesforceEDUCBA
Technical Anatomy
Tracking usually involves:
- Cookies: Stored on customer devices to trace link origins.
- Unique IDs or referral codes: Embedded in affiliate links.
- Time-limited tracking: Cookie durations often span 30–60 days, varying by program.Punith
Avoiding Pitfalls
There are darker practices like cookie stuffing—a deceptive technique where affiliates claim fake referrals or revenue. It’s banned by most programs and can result in serious consequences.Wikipedia
Historically, affiliate marketing also suffered from spam and misuse. Over time, stronger policies and responsible merchant practices have helped curb these issues.WIRED
Summary Table
| Step | Description |
|---|---|
| 1. Join Program | Affiliate signs up and gets a unique tracking link |
| 2. Promote | Share links via blog, social media, emails, or videos |
| 3. Track | Visit is tracked using cookie/referral technology |
| 4. Convert | Customer completes a specific action (sale, lead) |
| 5. Earn | Affiliate receives commission based on performance |
Why It Matters
Affiliate marketing is a powerful way for individuals to earn passive income while providing merchants with targeted, commission-based promotion. With transparency, strategy, and ethical practices, it’s become one of the most effective digital marketing models today.
