Affiliate marketing. You’ve probably heard about it before. You might even have considered starting affiliate marketing, and why not? Affiliate marketing is trending, and for good reason. The pay-per-performance basis on which affiliate marketing is built is very tempting for companies right now, as they don’t have to invest in big marketing campaigns but only pay out when one of their affiliates makes a sale. With successful affiliate marketing campaigns, companies can leverage the marketing efforts of individual affiliate marketers without bearing upfront costs. If you’re curious about how affiliate marketing works, but not experienced in it, this article is for you.
What is Affiliate Marketing?
The general idea of affiliate marketing is simple: A publisher with media (blog posts, email list, comparison site, etc.) promotes an offer from an advertiser to their audience. When a consumer purchases the promoted product and/or service, the advertiser pays a commission to the publisher. It’s important to note here that no sale means no pay, which is the foundation of the affiliate marketing model. With affiliate marketing, branding and marketing efforts for products and services are shared among different parties. This allows a brand to utilize the talents of individual affiliate marketers while offering them a share of the profits. The affiliate relationship between the advertiser and affiliate is crucial for driving affiliate sales. For affiliate marketing to work, three parties need to be involved: the advertiser, the affiliate, and the consumer. Affiliate networks often help facilitate these relationships and ensure smooth transactions.
- Advertiser
- Publisher or Affiliate
- Consumer
Advertisers affiliate marketing efforts
The advertiser is the owner of the product or service being sold through affiliate marketing. This can range from a large enterprise to a solo entrepreneur. The product or service can be anything, from kitchen utensils to magazine subscriptions, online courses, or just about any product that can be marketed online.
The advertiser promotes their product or service through the affiliate marketing network, utilizing various marketing methods. While affiliate marketing can be their primary marketing strategy, they often combine it with more traditional marketing channels, such as search engine optimization (SEO) or paid advertising. When someone buys a product or service from the advertiser, the advertiser gets paid, and in return, they pay a commission to the affiliate marketer who brought in the converting consumer. This creates a symbiotic affiliate relationship where both parties share in the affiliate sales.
Publisher or Affiliate – Creating the affiliate content
The affiliate marketer, or publisher, is the person (or company) who markets the advertiser’s products or services to potential customers. They will receive a commission for successfully promoting the goods through their own network and online presence. For every sale they generate, the advertiser pays them a commission.
For example, an affiliate marketer with a large following on social media platforms, say 100,000 followers on Instagram and famous youtube channel, may focus on beauty products. This makes it appealing for companies that sell beauty products to collaborate with them, as there is a natural alignment between the advertiser’s goods and the publisher’s niche audience. So, beauty company X approaches the affiliate to promote beauty product Y. The affiliate accepts and uses their Instagram account to create content around product Y, which is shared with their followers who are interested in beauty products. Sometimes, affiliates are given discount codes they can share with their audience. Every time a follower buys beauty product Y through the affiliate’s links, beauty company X pays them the agreed-upon commission.
In this affiliate marketing relationship, the advertiser gets more sales, the affiliate gets paid, and the consumer receives relevant, engaging content. This is the beauty of affiliate marketing—it’s a win-win-win for all parties involved. It’s a fantastic way to earn money while doing something you’re passionate about, like sharing products with your audience.
Consumers part of marketing efforts
Consumers may not always be aware of it, but they are the driving force behind affiliate marketing. Without consumers, there would be noaudience to promote products to.
When a consumer buys a service or product through affiliate link, the advertiser shares a portion of the profit with the affiliate marketer. Many affiliate marketers now disclose their role by sharing that they are part of an affiliate marketing program. You might have seen this in social media posts that use hashtags like #affiliate, #partnership, or #ad. Some publishers, however, do not disclose that they are part of affiliate programs which can be misleading if the consumer is not aware that the publisher is promoting affiliate products. There are, however, strict regulations in many countries that require affiliates to clearly indicate that they are promoting a product or service through an ad.
The affiliate marketer’s share of the profit is usually already factored into the retail price, so the price for the consumer is rarely affected by affiliate marketing. While it’s true that all costs are ultimately paid by the consumer, affiliate marketing remains one of the most cost-effective marketing methods for advertisers. Additionally, some affiliate marketers even offer discount codes, allowing consumers to pay less for a product or service when purchased through direct affiliate links.
The most important channels of affiliate marketers
Affiliates always look at one another to find the best ways to engage their audience and persuade them into making a purchase. Not all affiliate marketers use the same channels to do so. These are the most common marketing channels used by affiliate marketers.
Bloggers
A successful blogger often ranks well on search engines, particularly Google, which allows them to reach a large audience with the right search intent. Looking through google search console bloggers can provide detailed information on how many potential customers they can reach with different blogs. Bloggers often sample the advertiser’s product or service and write an extensive review that promotes the brand in a compelling way. This persuasive content encourages readers to make a purchase. The blogger then earns affiliate income for every sale generated for instance through their affiliate links
Cashback websites
Cashback websites are websites that facilitate the cashback a consumer can get after making a purchase. How does this work? The cashback website is an affiliate partner of the advertisers and offers part of their commissions back to the consumer as a cashback. Basically, the cashback website shares his commission with the consumer, which is how the cashbacks are paid for. There are even cashback websites that offer 100% of their commision as cashback.
Influencers and content marketing
A so-called influencer is someone with a large group of online followers which they can ‘influence’. An influencer is in a great position to become an affiliate. They already have a large following, so it’s relatively easy for them to steer consumers towards the advertisers’ products or services. They can use their social media page, blog or website to do so. Reaching an audience is one of the hardest parts of affiliate marketing, and an influencer already has that audience.
Looking for starting you affiliate marketing journey? Read our another blog on best affiliate marketing tips and trends for 2025!
The most common types of payment for affiliate marketers
Affiliate marketing is very tempting for anyone looking to increase their online income. It’s often seen as a quick and inexpensive way to make money online, because you don’t actually have to own a product or service. It’s not as easy as one might dream, you do need to draw a lot of attention to the product or services of the advertiser. A large online following is pretty much required to make affiliate marketing income.
The affiliate can get paid for every action on the consumer side. Let’s talk about the most common ways how affiliates earn affiliate revenue
PPS
The pay per sale, or PPS, structure is the industry standard. Every time the affiliate makes a sale, the advertiser pays them a percentage of the sale price. This percentage is different for every product and can vary between 5-20% of the sale price depending on the product/service sold. With a 10% commission the publisher gets 10€ for 100€ sale they generated.
This payment method is mostly preferred by advertisers because they only have to pay money when an affiliate actually makes a sale. The no cure no pay method makes it the safest option for the advertiser.
PPC
In the pay per click structure, the goal of the affiliate is to redirect consumers to the advertisers’ website. Every click means a website visitor for the advertiser. The affiliate must persuade as many consumers as possible to visit the website of the advertiser. The affiliate is paid based on the increase in visitors on the website of the advertisers. A click is easier to get than a lead or a sale, which is why this structure is the lowest paying for the affiliate but can also be effectively used in combination with other payment models.
PPL
The pay per lead, or PPL, structure is less common because a lead doesn’t necessarily mean revenue for the advertiser. In this structure, the affiliate gets paid for every lead they generate for the advertiser. A lead is someone that visits the advertisers’ website and performs a certain action, like signing up for a newsletter, a free trial, or filling out a contact form. This structure is used when the advertiser has a goal other than sales, like receiving email addresses to send their newsletters to.
Because the pay per lead structure doesn’t lead to direct sales, the commission for the affiliate is often lower than it is with pay per sale.
Thats how affiliate marketing works
You should now have a pretty clear understanding of the basics of affiliate marketing, what the different roles are, and how advertisers and affiliate marketers help each other make money. If you’re looking to grow your business using affiliate marketing, using the right affiliate software combined with the best expertise is crucial to your success. The Circlewise Partnership Hub is the ideal tool for both affiliate marketing newbies and experienced affiliate marketers as it allows them to manage, automate, and scale all of the partnerships in one place.
Get in touch with us and let get your affiliate programs started!
Read more: How to start your journey as an affiliate marketer
