Glossary
Affiliate Marketing
Affiliate marketing is a marketing strategy where individuals or businesses earn commissions by promoting another company's products or services.
Businesses use affiliate marketing to expand their reach, while affiliates recommend products they believe provide value to their audience.
Quick Reference
Definition
Affiliate marketing is a performance-based marketing model where a business rewards affiliates for referring customers who complete specific actions, such as making a purchase, subscribing to a service, or signing up for an account. Affiliates typically promote products or services using websites, blogs, videos, email marketing, social media, or other marketing channels. When a qualifying action occurs through the affiliate's unique tracking link, the affiliate may earn a commission according to the program's terms.
Why This Term Matters
Affiliate marketing allows businesses to increase brand awareness and sales without relying solely on their own marketing efforts. For affiliates, it provides an opportunity to recommend products and services they believe are valuable while earning commissions for successful referrals. Because businesses generally pay only when specific results occur, affiliate marketing is widely used as a cost-effective customer acquisition strategy.
How It Works
A business creates an affiliate program and provides affiliates with unique tracking links. Affiliates share those links through websites, articles, videos, newsletters, social media, or other content. When someone clicks the affiliate link and completes a qualifying action, the affiliate platform records the referral. If the action meets the program's requirements, the affiliate receives the agreed-upon commission while the customer purchases directly from the business.
Examples
- A blogger writes a product review and includes affiliate links to recommended software.
- A YouTube creator demonstrates a business tool and shares an affiliate link in the video description.
- An email newsletter recommends a digital course and earns a commission when subscribers purchase through the affiliate link.
Related Business Functions
Related Business Models
Related Terms
Frequently Asked Questions
What is affiliate marketing?
Affiliate marketing is a marketing model where affiliates promote products or services and may earn commissions when qualifying actions occur through their referral links.
Do affiliates create the products they promote?
Usually not. Affiliates typically recommend products or services created and managed by another business.
How do affiliates earn commissions?
Affiliates earn commissions when someone uses their tracking link and completes a qualifying action defined by the affiliate program, such as making a purchase or subscribing to a service.
Why do businesses offer affiliate programs?
Affiliate programs help businesses reach new audiences, increase sales, and grow through partnerships with affiliates who promote their products and services.
Final Thoughts
Understanding affiliate marketing helps explain one of the most common online marketing strategies used today. Affiliate marketing connects content creation, websites, email marketing, social media, sales funnels, tracking systems, and business partnerships into a performance-based model that benefits both businesses and affiliates when customers find products and services that meet their needs.