Brief Description about Affiliation
Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor
or customer brought by the affiliate's own marketing efforts. The industry has four core players:
the merchant (also known as 'retailer' or 'brand'), the network (that contains offers for the affiliate to choose from and also
takes care of the payments), the publisher (also known as 'the affiliate'), and the customer. The market has grown in complexity,
resulting in the emergence of a secondary tier of players, including affiliate management agencies, super-affiliates and specialized
third party vendors.
Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising
methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC - Pay Per Click), e-mail
marketing, content marketing and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox
techniques, such as publishing reviews of products or services offered by a partner.
Affiliate marketing is commonly confused with referral marketing, as both forms of marketing use third parties to drive sales to the
retailer. However, both are distinct forms of marketing and the main difference between them is that affiliate marketing relies purely
on financial motivations to drive sales while referral marketing relies on trust and personal relationships to drive sales.
Affiliate marketing is frequently overlooked by advertisers. While search engines, e-mail, and website syndication capture much of
the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant
role in e-retailers' marketing strategies.
The concept of revenue sharing—paying commission for referred business—predates affiliate marketing and the Internet. The translation
of the revenue share principles to mainstream e-commerce happened in November 1994, almost four years after the origination of the
World Wide Web.
The concept of affiliate marketing on the Internet was conceived of, put into practice and patented by William J. Tobin, the founder
of PC Flowers & Gifts. Launched on the Prodigy Network in 1989, PC Flowers & Gifts remained on the service until 1996. By 1993,
PC Flowers & Gifts generated sales in excess of $6 million per year on the Prodigy service. In 1998, PC Flowers and Gifts developed
the business model of paying a commission on sales to the Prodigy Network.