Affiliate marketing is a type of marketing where the affiliates can earn a commission for each customer they've brought into a 3rd party product/service via their own advertising efforts.
Different businesses can reward affiliates for different kinds of results, for example clicks, web-site visits, or downloads. However, the most common metric used in affiliate marketing is sales.
Why engage in affiliate marketing?
To businesses, affiliate marketing is a low-budget, low-time, and fairly low-effort avenue of driving their brand awareness, reputation, and online revenue up. Naturally, this is also a great way to increase the overall traffic and customer base a business receives. There's virtually no risk involved in running an affiliate marketing program.
To affiliates, affiliate marketing is an additional income stream that can be integrated into their content hassle-free. It is generally low-cost, or outright free, to sign up for, requires no specific maintenance work on the affiliate's side, and allows to avoid dealing with any customer issues.
Therefore, affiliate marketing is a low-risk mutually beneficial venture for both parties.
How does affiliate marketing work?
The general workflow for affiliate marketing is very simple.
A potential affiliate signs up for the program on the business' website (usually at no cost) and receives their very own affiliate link. This link can then be inserted into affiliate's content, such as blogs, articles, social media posts, podcasts, and so on. Generally, the affiliate will receive a payout for each purchase made via following their link, so it is in their best interest to make sure the audience clicks their link!
The payout rates and conditions vary a lot depending on the business. Some offer a percentage-based commission, while others may offer a fixed rate per action. Additionally, some businesses may opt to pay for actions other than purchases — downloads, installs, visits, or clicks for example.