What is Affiliate Marketing?

We earn commissions if you shop through the links below.

By definition – Affiliate Marketing is a sales channel made up of three parts. Affiliates who drive the sales, affiliate programs which are the offers or stores the affiliates promote and affiliate networks which provide the tracking and payment platforms that connect affiliates with affiliate programs.

Now if you’re ready to learn everything from terminology to how much you can expect to make as an affiliate, or even if an affiliate program is right for your company, then read through this post.  It is question and answer style and will be updated as I think of more relevant sections or as you request them (assuming they’re a fit).  If you can’t find the information you’re looking for, use the contact form or leave a comment below and I’ll try to add it to the post.

  • Affiliate Marketing Terminology
  • How Much Can I Make as an Affiliate
  • Is Affiliate Marketing Right for my Company
    • Stores and merchants
    • Publishers and content sites
  • Is Affiliate Marketing a Scam or High Risk
  • Are There Any Legal Issues With Affiliate Marketing
  • Why Didn’t Affiliate Marketing Work For Me
    • I didn’t make money
    • Why didn’t any affiliates join my program
    • I only had coupon sites, trademark bidders and scammers sign up
  • How Long Does Affiliate Marketing Take to Work
    • Publishers
    • Advertisers

what is affiliate marketing

Affiliate Marketing Terminology

One of the most important things to do if you want to succeed in affiliate marketing is to know the proper words and phrases.  By getting them wrong or mixed up you’ll not only confuse the people you’re cutting deals with, but you’ll be connected to the wrong people and create more work for yourself.  Here are the basic terms and phrases you’ll see and how to use them.

Term Definition
Affiliate Someone who promotes a product, offer or service on a revenue sharing  or performance basis.
Affiliate Program This is the offer, store or item an affiliate promotes.
Affiliate Network A tracking platform that tracks sales, provides metrics and works as a payment portal for affiliates and merchants. Affiliate networks allow communication between the advertisers or merchants and the affiliates or publishers.  CPA networks normally do not.
CPA Network Similar to an affiliate network, but a CPA network has single item offers or leads. Merchants and Advertisers are not given access to contact publishers or affiliates directly which can create numerous risks.
CPC A payment method where the publisher gets paid on a click basis.
CPM For merchants and advertisers, this is how much you’re spending per thousand views. If you’re a publisher, it is how much you charge or make per thousand impressions.
Affiliate Adware Affiliate adware comes in the form of pop ups, pop unders, coupon injections, toolbars, browser helper objects, couponware, loyaltyware, PPV, CPV and other terms. It is used to show ads over a website or merchant’s own site and take credit for a sale it did not refer. This could happen by injecting a coupon at checkout, showing an available coupon upon reaching a website or popping an ad over a website that the affiliate doesn’t own, or where the website owner did not give permission for the affiliate to show the ad.  This type causes financial harm and damage to the unknowing webmaster.
Affiliate Fraud Affiliate marketing fraud is when affiliates require you to have traffic in order to promote you or when they notice a loophole and take advantage of it. If you have to have traffic, that means they want to intercept it and reduce your margins. A loophole could be a 30 day payout but 90 day return. They can get paid and return the product well after you’ve checked for a completed sale. This term could also be someone selling a bad guide on “how to make money online”, but that falls more into the scam category than affiliate fraud.


How Much Can I Make as an Affiliate

The answer is as much as you put into it.  Chances are you will be able to make money as an affiliate, but it won’t be millions.  You could earn enough for a bar tab, a couple hundred bucks, maybe even a thousand a month.  However, you probably are not going to get rich.  If you think you are, I can share the secret on how to do this for a low price of $29.95…just kidding.

The truth is there are no courses on being an affiliate.  There are ways to learn SEO, how to grow a following on social media and build a sticky website.  They can all help you to succeed if you can weed through the garbage.  You also DO NOT have to pay for any of them.  There are thousands of amazing posts and videos on the web with really good examples for free.  If you want some that I use or like to follow for advice, use the contact form on the lower right hand side of this post and I’ll be happy to send you some.

In short, once you have the knowledge and begin building an audience or have a media strategy that works, begin incorporating affiliate links as well as CPM, CPC and sponsorships as part of a full monetization strategy.  This is how you can begin to build a second income and if you’re lucky and work hard, you can make it your primary.   But be careful not to fall for the scams and guides.  In the 15+ years I’ve been in the affiliate space, I have never seen a paid one that would work.  Yes, you can make money with affiliate marketing, but it is not fast or easy, unless you are a publishers/affiliate with a strong amount of quality traffic.

Is Affiliate Marketing Right for my Company

I’m answering this in two parts.  The first is if you’re a business owner or need leads and sales coming into your company.  The second is for a publisher.  This includes bloggers, social media influencers, a magazine or newspaper, email house, YouTubers and others who build traffic.

Stores, Businesses and Merchants

Affiliate marketing is not right and will not work for all stores or businesses.  If you don’t have the margin to be competitive, if the commissions are going to be lower than a CPM or CPC, or the customer won’t come back for repeat business, you may want to skip this channel, unless you can afford a strong payout.  The good news is that even if you break even on affiliate, you can almost always make money with a customer and previous customer list for years to come.

If you do have repeat sales, you have the margin to give your affiliates a decent commission (at least $5 to $10 per sale) and you also have countless hours to put into finding high value partners, then affiliate marketing is right for you.  The important thing to know is that affiliates do not come to you unless you are a huge brand.  You need to go out and find them, recruit them with enticing offers and deals and then sign them up and activate them.  This is part of affiliate management.  It is 100% your job and not the job of the affiliate network.

Affiliate networks will tell you they have XX,XXX affiliates and that’s why you should run your program there.  But all you’re going to get (for the most part) are low and no value partners.  This includes adware that poses as a value-adding, top-funnel traffic source.  Coupon sites that want to rank for your URL or Brand + coupons, tools that take your backlinks and traffic already coming in and redirect them through an affiliate link to earn a commission, and trademark bidders who will use Adwords and other channels to show up for your trademarks, tag your customers with an affiliate cookie and send them back to you.

The only job of the network is to provide tracking and pay your affiliates on time.  Networks also earn a commission on each sale which is why they encourage you work with these types of partners, even though they can be incredibly harmful to your bottom line.

If you allow these low value to no value partners in, well you were warned and it is now your fault.  You can always contact me to work on a plan with you to fix the problem when you’re ready.

Publishers and Content Sites

For the most part, yes, affiliate marketing is right for you.  If you’re already linking to stores, mentioning products and providing solutions, all of these could be missed revenue opportunities.  As long as you do not have any contractual or legal restrictions, why wouldn’t you want to make money off of the traffic already using your website and your past, current and future efforts?  The important change you will want to make is to include advertising disclosures in visible spaces at the top of posts and pages, and to make sure all outbound affiliate links are marked as no follow.

This is important to keep your sites SEO health in tact and to be compliant with the FTC.  I am not a lawyer so I cannot give advice on what is compliant, you’ll need to talk to a licensed attorney and ask the program’s manager what is compliant for their programs.

Is Affiliate Marketing a Scam or High Risk

Affiliate marketing is not a scam, but it is high risk.  If you’re launching an affiliate program and aren’t familiar with the channel, you’re in for a bumpy ride.  Always trust your instincts with this channel.

If it sounds to good to be true, like a super high conversion rate or a promise you’ll get a sales force or marketers, it is.  The scammers will use fancy wording like “we use SEO to bring you high quality or high converting traffic”.  That is a popular type of pitch for a site that wants to rank for your URL or Brand + Coupons which is very bad in almost every case.

If your top performers are relying on you to have traffic, or their traffic patterns match your own, you are probably being scammed.  Your partners who ask how much traffic you have (networks too) are actually seeing if it’s worth adding you so they can intercept your own traffic and sell it back to you.  They have great marketing spins so it sounds like it is adding value, but it probably isn’t.  Again, trust your instinct that something isn’t right because it probably isn’t.

If you’re a publisher or an affiliate, you also have high risks.  If you are new to the channel, you need to invest in a domain name, hosting, plugins and themes for your website or blog.  You have to spend countless hours that you could be living your life working to build an audience and traffic while also hoping it can convert.  It could sometimes take years before you get your first regular readers and fans.  Think of all the life experiences you just missed.

So why would anyone do this?  Because it works!

Like I said at the beginning, affiliate marketing is not a scam.  If you’re a store or have an offer, there are probably marketers, websites and influencers that will promote you and drive value adding leads and sales to you.  But you need to create the right atmosphere that meets their needs.  You also need to go out and find them, get them the tools they need to succeed and continue to build the relationship with them.

If you’re an affiliate, the odds are stacked against you.  If there are active coupon sites showing up for the store’s trademarks and people look for codes, you could lose your commissions.  The program could close and you now have to find an equal or better replacement and change out all of your links.  You also have to hope your traffic source doesn’t cut you off.

That could be an algorithm shift for Google or Facebook or your email database crashes and you can’t restore your backup.  It could also be your server crashing and loosing all of your content.  All of these things happen and can devastate an affiliate.  But if you are smart, dedicated and want to work hard, there is a very good chance you can succeed.  It probably won’t be overnight, but it can be done.  For me and for many others it is worth it.  With that said, most people are not cut out for it.

The people who aren’t willing to put the time and effort in from both the Merchant and the Affiliate standpoint are the ones that say Affiliate Marketing is a scam.  It is only considered a scam by them because they didn’t want to learn, put in the countless hours and were hoping for a quick win.  This channel is about long term success, not the quick fix.  The only channels that provide that are paid like PPC, Facebook ads and Email marketing.

Are There Any Legal Issues With Affiliate Marketing?

Absolutely.  If you’re a publisher you have to hope that the images your merchant’s and programs provide you with are actually owned by them and able to be distributed to you.  You need to ensure you’re giving accurate descriptions and information to consumers and you need to properly disclose your relationships.

If you have a program, you’ll need to ensure compliance with your partners to protect yourself.  Not all networks (especially the CPA networks) give you direct communication.  You’ll also have to hope they are not saying anything incorrect or bashing and defaming your competitors.  This could all lead to legal issues for you.  That’s why a hands on approach to management is 100% needed and you should never let an affiliate program run on autopilot, set it to auto approve or allow someone in without properly reviewing their applications and/or talking to them.

Why Didn’t Affiliate Marketing Work For Me?

This is easier to answer in two sections, first affiliates and then merchants.  I also included two follow up topics that fit as sub categories for this.

Affiliates or Publishers – the reason it didn’t work is because you did not put the effort in and keep trying.  The majority of people who become affiliates will not do what it takes to build a quality destination or properly learn how to buy ad space and drive relevant traffic.  Yes, even if you do everything right, affiliate marketing might not work for that site which is when you need to move into the next niche and start over.

I get lots of questions about this when I speak at conferences where the person swears they are doing everything right, then I see their site or strategy and it turns out they did almost everything wrong.  It is not an easy or quick channel to make money in, but if you put in the labor and hours, it can work for you.  You always have to test and try to learn more.  It is an ongoing and grueling process, but one that I personally think is worth it in the long run.

Merchants and Advertisers – the reason it didn’t work or why you lost money is because you didn’t put in the work.  Work for you means knowing what adds value and does not. You need to learn how affiliate adware works and why coupon sites showing up for your URL or Brand + coupons is bad for you.

You also probably did not recruit partners with custom written emails, landing pages designed just for them or assumed they would find you.Another reason it may not have worked could be that your website or store isn’t very good or you didn’t create a competitive payout or offer for the affiliates.

Affiliate marketing does work in many niches, but you have to put in the labor hours and also create the right settings to make it work.  When I talk to merchants and stores that say it didn’t work, doesn’t work or is a scam, those are the reasons the majority of them think so.  It was their fault for not wanting to learn and put in the effort.  The channel could have worked for them, they chose not to let it.

Why Didn’t I Make Money?

Suppose you did put in the effort and time and built a following or a good amount of traffic. It can happen that you still don’t make money with affiliate marketing.  Don’t worry because getting traffic is the hard part, monetizing is the easy one.  I have this post about mistakes affiliates make which is worth a read.

Here are some ways you can try testing or take a look at to help generate some sales.

  • Pre-selling – if you don’t give a reason or benefit to buying the product or offer, there is a good chance it won’t convert.  Posting a banner or product link isn’t enough.  Show the person viewing your content will benefit from it and give a reason to click your link.
  • Not matching your audience to the landing page and store is another common mistake. If your audience doesn’t care about price, send them somewhere that caters to their needs and how they’ll benefit instead of talking about an amazing deal.  If they are frugal, then show them how to find a deal and make sure the store talks about savings.  Matching the store’s brand and prices to your audience is a big one that can make a difference.
  • Broken tracking, theft and leaks can lead to you not making money.  It is your job to evaluate the merchant and make sure no active affiliates show up in Google if people search for the store + coupons.  You also need to check that the store doesn’t send people off the site to price compare or have ads running, etc…  You also need to make sure you do not advertise or recommend people install coupon reminders, cash back sites or browser extensions.  These can all impact your ability to earn money as an affiliate.
  • Cross device tracking is now a growing culprit for not making money.  If most of your traffic is mobile and the store or landing page is slow to load, is hard to use on a mobile device or provides a bad experience, that could cause the person to change to a computer and finish later.  If the store doesn’t have cross device solutions in place, you may not make money.

Why Didn’t Any Affiliates Join My Program?

The reason no “real affiliates” joined your program is because you didn’t do the work to bring them in.  It is not the network’s job to bring you affiliates, even though they pitch they have a ton of them.  It is your job or the job of your affiliate manager.  You need to write custom email pitches (not copy and paste spam) explaining how the partner will benefit the potential partner.  You need to pay for and run ads to recruit them and you need to be at the tradeshows where your potential partners are going to be.  If you did not do that, then that is why no affiliates joined your program.

I Only Had Coupon Sites, Trademark Bidders and Scammers Sign Up

If you’ve launched a program you see these types of sites fly in first.  Sometimes you’ll get 200 of them in the first couple weeks.  For the most part, the only types of affiliates who join are the ones who will try to intercept your own efforts.  By doing this they can tag the traffic you worked hard to get and send it back to you for a commission.  That’s why they’re considered low-value and no-value partners.

This includes:

  • Optimizing for your trademarks in Google, Bing or Yahoo
  • Bidding on them as keywords with PPC campaigns
  • Intercepting as a browser approaches or starts to check out on your site
  • Because you have a long return period and they get paid out before it’s over

Remember, it is your job to bring in partners that will add value.  Sometimes high value partners come to you, but the majority are people who will cause damage.  The only way to prevent this is to learn how each one works and remove them from the program if you find them poaching your own internal efforts.

The biggest fear is that the program will die, but if all they are doing is tagging your own traffic with cookies because the person went to Google to find a deal at checkout, if you remove them you may find that you are actually more profitable in other channels by no longer paying commissions on this type of behavior.  Your affiliate program will die, but your company will be more healthy and profitable if you do this the right way.

How Long Does Affiliate Marketing Take to Work?

This section is broken out by publishers and advertisers.  The publisher section is for affiliates who are looking to make money with their websites, email lists or other assets.  The advertisers section is for someone who has a store, offer or something they want others to promote.

Publishers – this depends on your traffic and the quality of that traffic.  If you can find stores and offers that match it and also pre-sell the value of their products or services, you can make money quickly.  The more quality traffic you have, the more you can make by finding the right products, offers and deals.

Advertisers – It can easily take one year to 16 months to get to a break even point if your program is value adding.  You have to recruit partners in, get them to add you to their sites, have those pages index and get traffic.  Next you need to hope that traffic clicks through from their site and also converts on your site.

It is a very long and tricky process.  There are ways to speed it up by incorporating a placement budget, refer-a-friend program, etc…  Those are things I can help with if you’d like to use my affiliate management services.  But even with these, it can easily be a year before you get to a break even point.

Affiliate marketing is probably the best and most reliable channel for a company and for a publisher.  The goal for merchants is to not have anyone showing up for your trademarks like YourStoreName Coupons in Google or using adware.  Instead you’ll want to have partners who can bring you new customers and top of the funnel sales.  For publishers and affiliates it is finding the right balance and mix of merchants who will be around for the foreseeable future and not close their programs.  If you’d like help getting into affiliate marketing, use the contact form on the right hand sidebar or click here to contact me and I’ll be happy to help.

Join My Newsletter & Never Miss Another Post!

Contact Us

Contact Us

6 thoughts on “What is Affiliate Marketing?”

  1. Hi Adam,
    Excellent post. Thanks for sharing this detailed explanation regarding affiliate marketing. This will help the beginners to completely know about Affiliate Marking and how to work on it. Thanks for sharing this great post.

  2. Hey Adam,
    This is absolutely the best article I’ve seen on Affiliate Marketing in a long time. You didn’t leave out any details and were fast to the point with no fluff. Great article!
    I’d just like to add that no matter how long it takes to be successful in affiliate marketing it’s well worth what ever it takes to make it. Forget trying to be a millionaire with affiliate, find a way to make $50k a year and it’ll change most peoples lives.
    Never, ever give up!
    Keep up the great work Adam.

  3. Shannon Alegria

    Adam, I have to give you a big hug, because over the past few months I have been researching online how to make money from home. I have gathered so much information to the point that it has all become one big giant ball of twine. I feel like I am always back where I started. I have had your article for months and I am just now getting to it because I was going in the order I received them. Your article has done more for me in an hour than 200 hrs of research. I agree with Jim your straight to the point, no tidbits of info to leave me scratching my head. I bet you are a no-nonsense kind of guy and that is a genuine quality and that quality in you is perceived even in your writing. Thank you so much looking forward to more of your straight shooting articles.

  4. Prashant D Kukarni

    Hey Adam,

    Thanks for this wonderful piece of information.

    You seems to be a master in this subject as you have gone in depth to tell your readers the pros & cons of affiliate marketing.

    I liked your research related to the landing pages, the type of audience you should have, as all these things are very important.

    One of the most important & ignored thing which you have highlighted is affiliates not putting much of the effort for what it takes to become successful.

    Most of the information is split between Affiliates or Publishers and Advertisers.

    It is worth mentioning some of the points you have given for affiliates as why they can fail amd what are precautions they can take especially the comment ” If you don’t give a reason or benefit to buying the product or offer, there is a good chance it won’t convert.”

    Thanks again for sharing valuable content

  5. Hi Adam, This was so far the best and most detailed article on affiliate marketing that I’ve read in the past years. I must say that you did a great job in compressing everything in such a short article. This helped me soo much. Thanks again.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to Top