Affiliate marketing is an online advertising channel in which online merchants that sell products or services pay web site owners only for results, such as a visitor making a purchase or filling out a form, rather than paying simply to reach a particular audience. These types of marketing channels don't typically produce as good of results as PPC search marketing but are a viable alternative for marketers whose targeted keywords have bid beyond a feasible limit.
Affiliate marketing company's such as LinkShare, ShareASale,
ClixGalore or Commission Junction provide web sites to bring advertisers and web site owners together.
Advertisers make their ad links available for placement by web site owners. Each link is assigned a commission, such as a fixed amount per lead or a percentage of a resulting sale on the advertiser's web site. Web site owners select and place the advertiser's links on their web sites, in their email campaigns or as part of search listings.
When a consumer clicks on a publisher's link, a cookie is set on the visitor's browser that identifies the advertiser, the publisher, and the specific link and payment rates. When the visitor makes an actual purchase or fills out a form, that transaction is tracked and recorded.
Typically the affiliate marketing company handles all of the collection and processing required to ensure fair and timely commission payment, and all of the administration and verification necessary to ensure quality sales and leads for the advertiser.