Affiliate marketing
A model in which a marketer is paid a commission for driving a defined action, such as a sale or sign-up, for an advertiser.
What is affiliate marketing?
Affiliate marketing is a performance-based arrangement in which independent partners, called affiliates or publishers, promote an advertiser’s product and earn a commission only when a tracked outcome occurs. Outcomes can include a sale, lead, install or subscription, and the payout may be a fixed amount or a share of revenue. Affiliate networks often sit in the middle, supplying tracking, offer catalogues, fraud checks and payment. Affiliates use many traffic sources, including content sites, comparison pages, email, social, push and native ads. The model is closely tied to CPA pricing and server-side conversion tracking.
How affiliate marketing works
An affiliate promotes an offer using its own media or bought traffic. Conversions are tracked back to the affiliate, typically by postback, and the advertiser or network pays per result.
- The advertiser defines an offer, a payout, the qualifying action and any traffic restrictions.
- An affiliate joins the program and receives a unique tracking link or identifier.
- The affiliate drives users to the offer through its chosen traffic sources.
- When a user completes the action, the conversion is attributed to the affiliate, commonly through a postback.
- After validation, the network or advertiser pays the commission according to the agreed terms.
Why it matters
Advertisers pay only for outcomes. Affiliates carry the media risk, so they depend on traffic sources whose cost and conversion rate are predictable.
For advertisers
Paying on results makes acquisition cost predictable, provided the qualifying action and validation rules are clearly defined.
For publishers
Content and traffic owners can monetize audiences through commissions in addition to, or instead of, display revenue.
Practical example
An affiliate buys push traffic for a subscription app and earns a fixed payout for each completed trial.
Key considerations
- Clear attribution rules, such as lookback windows and last-click versus multi-touch, prevent payout disputes.
- Fraud risks include fake leads, cookie stuffing and incentivized traffic that does not convert into lasting customers.
- Disclosure of affiliate relationships is required in many markets.
More Performance Advertising terms
Frequently asked questions
How are affiliates paid?
Usually per qualifying action at a fixed rate, or as a percentage of the sale value, after the advertiser validates the conversion.
What does an affiliate network do?
It connects advertisers with affiliates and typically handles tracking, reporting, fraud screening and payments.
Why do affiliates use paid traffic?
Buying traffic lets an affiliate scale quickly, as long as the cost per visit stays below what it earns from the resulting conversions.