affiliate marketing

A revenue sharing arrangement between online advertisers or e-commerce merchants and online publishers or Web site owners, whereby payment is based on performance measures, such as the number of sales, clicks, or registrations that the affiliate refers. In other words, two companies agree to link to one another; if someone clicks from site A to buy something at site B, site A gets a commission on the sale.

Affiliate marketing is a marketing channel used to generate leads or sales, whereas affiliate software provides the tracking and reporting of these commission-based activities (the sales, clicks, or registrations). For example, "most of my earnings are from affiliate marketing, direct ad sales and sponsored posts."

Historical perspective: Amazon.com pioneered affiliate marketing 1996 by getting as many other Web sites as possible to join its affiliate network and sell its products, thereby greatly extending its marketing reach.

NetLingo Classification: Online Marketing
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