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Affiliate Marketing
Affiliate Marketing
By JAKE FRANKENFIELD
Updated Aug 21, 2019
What Is Affiliate Marketing?
Affiliate marketing is an advertising model in which a company compensates
third-party publishers to generate traffic or leads to the company’s products and
services. The third-party publishers are affiliates, and the commission fee
incentivizes them to find ways to promote the company.
Affiliates redirect visitors who click on one of these links or ads to the e-
commerce site. If they purchase the product or service, the e-commerce
merchant credits the affiliate’s account with the agreed-upon commission, which
could be 5% to 10% of the sales price.
The goal of using an affiliate marketer is to increase sales—a win-win solution for
the merchant and the affiliate.
KEY TAKEAWAYS
Firms typically pay per sale and less frequently by click or impression.
Now, most affiliate programs have strict terms and conditions on how to generate
leads. There are also certain banned methods, such as installing adware or
spyware that redirect all search queries for a product to an affiliate's page. Some
affiliate marketing programs go as far as to lay out how a product or service is to
be discussed in the content before an affiliate link can be validated.
Unscrupulous affiliates can squat on domain names with misspellings and get a
commission for the redirect. They can populate online registration forms with fake
or stolen information, and they can purchase AdWords on search terms the
company already ranks high on, and so on. Even if the terms and conditions are
clear, an affiliate marketing program requires that someone monitor affiliates and
enforce rules.