Affiliate marketing is a type of strategic partnership between businesses, where a business rewards affiliates on a performance basis for using their marketing power to bring visitors or customers to the company. Affiliate marketing essentially has four key components:
1) The merchant, who has the retail product or brand to push.
2) The network, that provides offers that the affiliate chooses from and handles payment processes.
3) The publisher (affiliate) who uses their marketing power to bring traffic and business to the merchant.
4) The Customer, who clicks on the affiliate’s marketing material and is lead to give the merchant their business.
Many Internet marketing methods are implemented by affiliates to bring traffic and business to the merchant companies who use them. These advertising methods may include: organic search engine optimization (SEO), pay-per-click ads, traditional email marketing, and sometimes display advertising. Other less orthodox or more creative methods may also be used by these third parties to push sales to a retailer.
Affiliate marketing differs from referral marketing in that it relies entirely on monetary motivation to push sales to the retailer, and referral marketing uses trust and a more personal familiarity with the product to drive sales to a business.
Partnering with another company and utilizing their marketing resources can be a great way to utilize an online network instead of building your own Internet advertising presence from scratch. It can be beneficial to a retailer when these affiliates provide a fixed cost for their handling of the daily ebbs and flows of the web’s advertising and keyword market. Affiliate marketing can be a great strategy for business relations and growth, whether you’re working a Fortune 100 brand or assuming multiple responsibilities as a startup company.