So what is affiliate marketing?
Affiliate Marketing is an Internet-based marketing practice, in which a business, rewards one or more affiliate for each visitor or customer brought about by the affiliate’s marketing efforts.
The Affiliate Marketing industry has four core players at its heart: the Merchant, the Network, the Publisher and the Consumer. The market has grown sufficiently in complexity to warrant a secondary tier of players, including Affiliate Management Agencies, Super-Affiliates and Specialized Third Parties vendors.
Affiliate marketing—using one website to drive traffic to another—is a form of online marketing, which 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 strategy.
So for instance Web 2.0 practices have improved affiliate marketing.
Websites and services based on Web 2.0 concepts—blogging and interactive online communities, for example—have impacted the affiliate marketing world as well. The new media allowed merchants to become closer to their affiliates and improved the communication between them.
New developments have made it more difficult for unscrupulous affiliates to make money. Emerging black sheep are detected and made known to the affiliate marketing community with much greater speed and efficiency.
The Pros and cons are;
Merchants favor affiliate marketing because in most cases it uses a “pay for performance” model, meaning that the merchant does not incur a marketing expense unless results are accrued (excluding any initial setup cost). Some businesses owe much of their success to this marketing technique, a notable example being Amazon.com. Unlike display advertising, however, affiliate marketing is not easily scalable.
Affiliate marketing is for any size business and is often overlooked as an effective emarketing technique.