Digital marketing glossary
What is affiliate marketing?
Written and reviewed by L.K. Monu Borkala · Updated
Definition
Affiliate marketing is a way of selling where a business pays a commission to people or websites, called affiliates, for customers they refer. The affiliate shares a tracked link or code, and when someone buys through it, the affiliate earns a fixed amount or a percentage of the sale.
How it works
The business, often through an affiliate network or its own programme, gives each affiliate a unique link or coupon code. Tracking, usually a cookie or the code itself, connects a purchase to the affiliate who referred it within an agreed time window. Affiliates promote the product through blogs, YouTube reviews, Instagram, WhatsApp groups or newsletters. Commissions are paid after returns and cancellations are settled. For the business, it is pay-for-results marketing; for the affiliate, income depends on trust with their audience. In India, ASCI's advertising guidelines expect creators to clearly disclose a material connection, such as an affiliate commission, for example with a label like '#affiliate' or 'Ad'.
Example
Picture a tech reviewer in Chennai who reviews budget earphones on YouTube. Each video description includes affiliate links to the products on online stores. When viewers buy through those links, the reviewer earns a small percentage of each sale. Because the reviews are honest, including cons, viewers trust them, and commission income grows steadily.
An illustration: the business and the rupee figures are made up to show how the idea works.
Common mistake
Promoting products you haven't used just because the commission is high, which quickly destroys trust. Another mistake is hiding the affiliate relationship; besides breaking disclosure rules, audiences feel cheated when they find out.
Where you learn it
- Module 10: Advanced Growth
- Class: Affiliate Marketing
Related terms
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