affiliate marketing

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A specific type of marketing on the World Wide Web that is characterized by revenue sharing between online advertisers or merchants and online publishers or salespeople. Affiliates give wider advertising and sales distribution online to the merchant's products. Typically, an affiliate model works in the following way: a smaller website owner registers with a larger and better known website (e.g. Amazon.com or some other affiliate programme), the website owner then puts various links, banners, and products on their website. The larger website owner pays the smaller website owner when visitors click through on these links and purchase a product. Benefits of affiliate marketing include the potential for automating much of the advertising process (such as accepting and approving applications, generating unique sales links, tracking and reporting of results) and payment by desired results (sales, registrations, clicks). Affiliate compensation can also be based on attention metrics, such as audience size, registrations, subscribers, click-through and website access. Paying for performance shifts much of the advertising risk from the merchants to the affiliates, although merchants still assume some risk of fraud from partner sites. Amazon.com uses affiliate marketing techniques very effectively. Affiliates are usually small sites run by individual webmasters. However, there is a growing trend for large companies to use affiliates. Some companies even participate as a merchant of their own programme and as an affiliate of other programmes.

Subjects: Marketing.

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