Affiliate marketing is a performance-based arrangement in which a business rewards approved partners for generating defined outcomes such as sales, leads or sign-ups. Affiliates may include publishers, creators, comparison sites, niche communities or other partners whose audiences fit the offer.
How affiliate marketing works #
- A business defines the offer, eligible actions, commission and programme rules.
- Affiliates apply or are invited and receive approved links or tracking identifiers.
- A customer clicks a link and completes a qualifying action.
- Tracking and attribution rules determine whether the action qualifies.
- The business validates the action and pays commissions according to the agreed terms.
Common commission models #
- Cost per sale: commission for a validated purchase.
- Cost per lead: payment for an eligible lead.
- Cost per action: payment for another defined action, such as a registration.
- Recurring commission: ongoing commission for eligible subscription revenue, where programme terms allow it.
Programme planning #
Choose affiliates based on audience relevance, trust, content quality and compliance—not reach alone. Define attribution windows, returns and cancellations, prohibited traffic, coupon rules, brand bidding, payment thresholds and dispute handling. Provide accurate product information and creative assets.
Measurement #
Track clicks, conversion rate, approved sales or leads, commission cost, average order value, refunds, customer quality and contribution margin. Compare affiliate results with other channels while accounting for overlap and incremental impact.
Risks and compliance #
Use reliable tracking, detect fraud and disclose affiliate relationships clearly in accordance with applicable rules. Do not treat every attributed sale as incremental: some customers may already have intended to purchase. Review partner quality and programme economics regularly.
