Affiliate Program – The word affiliate means a person or subsidiary group officially connected to an organization. Whereas, the word program can be explained as an operation as a result of a series of instructions followed.
Affiliate marketing – here the word marketing can be defined as the action of promotion and selling products or services by virtue of market research and advertising. Whereas, affiliate marketing is a kind of performance-based marketing, wherein a business happens to reward one or a number of affiliates for each visitor or customer brought by the affiliate’s painstaking marketing efforts. Revenue sharing is to pay a commission for the subject referred business which is an actual concept.
The industry has four key components, that is, MERCHANT – we may call advertiser or brand or retailer. NETWORK – it consists of offers provided to affiliate to choose from and facilitate payments. PUBLISHER – we can call it as an affiliate. CUSTOMER – who buys products or services.
Affiliate programs to the tune of 80% nowadays use REVENUE SHARING – distribution of revenue among stakeholders, PAY-PER-SALE – and/or COST-PER-SALE is known as an online advertisement pricing system, wherein website owner or publisher gets payment based on number of sales in response to he advertisement. Whereas, 19% of affiliate programs use COST PER ACTION is defined as click or form submit such as contact request, newsletter signup, registration or a sale as per an online advertising measurement and pricing model. The remaining 1% of affiliate programs use COST PER CLICK and/or COST PER MILLE defined as cost per estimated 1000 views which is a kind of measurement in advertising.
In case of more mature markets, affiliate marketing programs less than 1% nowadays use COST PER CLICK and COST PER MILLE.
We can also call it performance marketing, wherein, sales employees are paid a commission for each sale on closing and at times paid performance incentives on exceeding the set targets.
WPEngine: WordPress Affiliate Program