Peter Ryan H

Defining an Affiliate and Affiliate Program and Its Place in Internet Marketing

"Webster’s defines an affiliate as a party that is joined with another in a relationship, business or otherwise; a partnership that is beneficial to both. With the enormity of the global marketplace due to innovations in Internet technology and connectivity, an affiliate has taken on an expanded and more specialized place in the world of internet marketing, and many businesses would be nowhere without their relationships with affiliates..."

Webster’s defines an affiliate as a party that is joined with another in a relationship, business or otherwise; a partnership that is beneficial to both. With the enormity of the global marketplace due to innovations in Internet technology and connectivity, an affiliate has taken on an expanded and more specialized place in the world of internet marketing, and many businesses would be nowhere without their relationships with affiliates. For many Internet based companies, affiliates act as a front line, point of purchase contact for generating new sales, helping funnel new clients to their website, and hopefully making purchases.

An affiliate as it pertains to worldwide web marketing can be seen as an emissary of sorts, an independent representative or salesperson that is not specifically employed by any one company, but often shares in the profits and revenues of several. Affiliate programs have been around for quite a while and can be quite lucrative for both the companies benefitting from their help and the affiliates themselves. There are a variety of arrangements that are agreed upon within affiliate programs that individuals and companies enter into. Many companies pay their affiliates a percentage of the eventual sale that results from leading a customer to their site. This sort of revenue sharing based upon sales is know as a pay-per-sale (PPS) arrangement. Affiliates lead new customers to company websites by both advertising the company’s products on their own website and by linking to the company’s website from theirs. The company benefitting from the relationship is able to track what customers came from where (which affiliate) and provide due compensation accordingly. Some affiliate relationships do not require an actual sale be made at all. These relationships are known as pay-per-lead (PPL) programs and pay the affiliate for leading customers to their website with the hopes of purchasing but not required, in order to be compensated. Usually a larger percentage of profit is accorded to those affiliates that actually motivate closed sales, but a commission for sending customers to a company is duly noted and rewarded as well.

Affiliates and affiliate programs are integral parts to successfully advertising and marketing an Internet based company desiring more sales and greater profits. Though specific programs have their differences, these programs are primarily the same in that a business relationship has been formed by different parties to be mutually financially beneficial for all involved, according to mutually agreed upon terms.

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