What is Affiliate Marketing?

The term "affiliate marketing" is familiar to most people. At Affiliate marketing, advertisers and service providers are brought together via a network. The remuneration of the advertising media is carried out via different systems and can differ greatly from each other. We enlighten you about the functionality and special features of affiliate marketing!

What is Affiliate Marketing?

Affiliate marketing is an Internet-based sales system in which websites are remunerated with a commission if they place advertising for a third-party provider. Various advertising materials are made available to the advertiser, which can be placed by e-mail or on websites, blogs and online shops. All affiliate systems are based on the principle that a referral commission is paid. The referral is made through advertising banners or links, which are provided with an individual code. Through the code in the advertising material is recorded, about which website the customer was referred. Commissions are paid for various types of referrals. The following actions are remunerated:

"Click" - customers click on a banner and get to the relevant homepage.
"Lead" - Qualified customer contacts are mediated.
"Sale" - A customer was referred and this customer made a purchase.

Unlike traditional merchants, affiliates (platforms that offer banner ads and the like) merely act as an interface between the seller and the advertiser. This offers the advantage that the advertiser gets his revenue safely. On the other hand, the seller can benefit from a large number of advertising sites on which his ads are targeted to specific groups. As soon as a user clicks on an advertisement, he is redirected to the page of the respective merchant. In the process, parameters are transmitted by which the advertiser can be clearly identified. This method is called tracking. Cookie tracking can be used to track and assign Internet users. As soon as a user visits the website again at a later point in time, he or she will be recognized by the stored cookies. Cookie tracking is the most frequently used method to track the behavior of users in affiliate programs. As a rule, it can be assumed that fair commissions are paid. Providers of products and services can market their services widely and benefit from numerous sales channels. Commissions are usually only paid in the case of measurable success or generated sales. Websites with advertisements are at a disadvantage because they have to bear the provider's business risk. The limited advertising space is therefore only filled with ads when it seems worthwhile for the advertiser. This puts affiliate providers under pressure: they have to find fair remuneration models and ensure fair payment.

Participants of affiliate systems

Affiliate systems consist of a triangular constellation. The affiliate system operator is responsible for the provision of the advertisements and the operation of the mediation portal. The operator must guarantee error-free operation and take over the marketing. Merchants offer their products and services on the Internet and provide the affiliate system with advertising banners. Their task is the remuneration of advertising. The sales partner places advertisements on his homepage and receives commission for advertised products.

Compensation models

Pay per Click

With the "Pay per Click" remuneration model, a commission is paid for each click on the advertising material. IP blocks prevent fraud through repeated clicks. With the pay per click model, the quality of the visitor flow is difficult to measure. In the end, the provider hardly knows whether the influx of visitors has a real benefit.

Pay per lead

With the "Pay per Lead" remuneration model, a commission is only paid if the customer makes a qualified contact. This can consist, for example, of the customer ordering advertising material or making a telephone call. The Pay per Lead method is primarily suitable for products and services that require a higher level of consultation. Complex products are only ordered after intensive consultation, which is why "pay per sale" remuneration must be excluded.

pay per sale

With the "Pay per Sell" remuneration model, a commission is paid when the customer generates sales. Originally, only the first sales of a customer were remunerated. In the meantime, many providers have started to pay a commission on all sales. These sales are either granted for life or within a period of 30 to 90 days.

Pay per Click Out

With the "Pay per Click Out" remuneration model, a commission is paid when the customer has reached the website of the sales partner and clicked on another link there.

Pay per link

With the "Pay per Link" remuneration model, the pure switching of links is remunerated.

Modern companies offer combinations of the individual remuneration systems. Often a combination of "Pay per Click" and "Pay per Sale" is offered. The type of remuneration is a decisive factor for advertisers. It decides on which main or subpage affiliate funds are placed. The more attractive the remuneration is, the higher the potential benefit of the advertising media.