What is Affiliate Marketing?

Affiliate marketing is a promotion model where independent partners (affiliates) send customers to an advertiser and earn for measurable outcomes: clicks, leads, sales, installs, or revenue share (revshare). Payment ties to actions, not impression volume — a form of performance marketing.

The model dates to the late 1990s (Amazon Associates, affiliate links on content sites). With CPA networks and paid social, affiliate marketing became the backbone of traffic arbitrage: many affiliates buy traffic rather than relying on organic reach alone.

Ecosystem participants

  • Advertiser — product owner; sets KPIs, payout, GEO, and rules.
  • Affiliate — promotes the offer (paid, SEO, email, influence).
  • Affiliate network — offer catalog, billing, postback, traffic disputes.
  • Consumer — end user who completes the target action.

Payment models

Common models: CPA (per action), CPL (per lead), CPS (per sale), CPI (per install), and hybrid (fixed + %). Terms are defined in the offer: caps, hold, bans on brand bidding and incentivized traffic.

Attribution and tracking

Conversions attach to partners via cookies, URL click ID, or device ID (mobile). In CPA, last-click attribution is typical: the final click before the action wins. Network postback (S2S) to the affiliate’s tracker confirms the conversion and payout.

Acquisition channels

Classic channels: content sites, coupons, cashback, email, comparison portals. In performance, paid sources dominate — Meta, Google, push, native, in-app. The line between “classic” affiliate and media buyer is blurred: the distinction is whether the partner pays for each visit.

Large advertisers sometimes run in-house affiliate programs (direct contracts without a network); smaller players often use CPA networks for postback, antifraud, and payout infrastructure. An affiliate manager helps pick offers, negotiate cap increases, and resolve disputed conversions.

Compliance and fraud

The industry is governed by network and advertiser rules: no misleading claims, cookie stuffing, fraudulent clicks or installs. Violations trigger payout holds, network bans, and clawbacks. In the EU, GDPR affects pixel and email data (consent).

Relation to arbitrage

Affiliate marketing is the umbrella term for partner models. Traffic arbitrage is a subset where the main cost is paid ads and revenue is the gap between traffic cost and payout. Many affiliates combine both depending on offer and source.

Contracts are network terms or direct agreements: allowed traffic types, brand bidding bans, cookie lifetime, and payout currency. Breaches are grounds to deny payment even when a conversion was technically recorded.

See also: affiliate network, payout, attribution.