Affiliate marketing is a performance-based marketing strategy where a business compensates one or more affiliates for driving traffic or customers through their own marketing efforts. The key players in this industry include the merchant (the retailer or brand), the network (which provides offers for affiliates to choose from and handles payments), the publisher (the affiliate), and the customer. As the market has grown, additional players have emerged, such as affiliate management agencies, super-affiliates, and specialized third-party vendors, adding complexity to the landscape.
To some extent, affiliate marketing shares similarities with other online marketing methods since affiliates may employ conventional advertising methods. These may include organic search engine optimization (SEO), paid search engine marketing (PPC), email marketing, content marketing, and to some extent, display advertising. However, affiliates may also utilize unorthodox techniques such as writing reviews of a partner's products or services.
Despite similarities with referral marketing, affiliate marketing is distinct and relies solely on financial incentives to drive sales, while referral marketing is built on trust and personal relationships.
Advertisers tend to overlook affiliate marketing in favor of other online marketing channels such as search engines, email, and website syndication. Nevertheless, affiliates still play a significant role in the marketing strategies of e-commerce retailers.