What is affiliate marketing?

Affiliate marketing is a type of marketing where “resellers”, named affiliates, helps promote an advertiser and the advertisers products/services. The affiliate receives commission from the advertiser. The amount the affiliate makes depends on the amount of registered sales, since the commission (most often) are based on a percentage of the sales.

This kind of marketing thereby build on performance and results, and are sometimes called performance marketing.

How it all started

Internet hit hard in the 1990’s and it was also around this time when the first e-commerce stores opened. Inventive marketing managers started to develop strategies for this new market. The sales channels now also included resellers online - affiliates. Amazon.com was one of the first companies that offered commission for mediated traffic and sales.

The ideas about this new sale- and marketing channels grew. Specialized networks started in the end of the 90’s to offer this type of marketing to smaller e-commerce companies. The first affiliate networks where born!

How does it work today?

Today, there are a lot of affiliate networks across the globe. Some are specialized in specific areas, and some works more generally. The affiliate industry, and the principles, are often alike and we explain it down below. But first, let’s sort out some concepts:


Most often an e-commerce store and a company that sells products and/or offering services where the purchase is made online.

Affiliate program

The agreements and terms that applies between the advertiser and the affiliates. Includes information such as tracking time, traffic terms and commission, for example.


Affiliates are the ones that owns website, blog’s, social media channels or other channels. An affiliate can have more than one website or channels where one or more advertisers and their products/services are promoted.

Affiliate network

The platform where affiliates and advertisers meet. The affiliate network keeps track of and trace the traffic from the sales. The sales are registered and the affiliates then get the commission.

Affiliate marketing in practice - how does it work?

The process starts when the advertiser are being accepted to the affiliate network. Commission and other terms are also being set up. Affiliates apply to the programme and hen start to link to the advertiser by text links or banners on their channels. When the visitors on the channels click on the links to the advertiser and then makes a purchase, the affiliates commission are registered (If the purchase is made in the given tracking time).

Compensation and commission

The commission may vary from network to network and from advertiser to advertiser. This is some of the most common events that affiliates get commission for:

  • Sale - Often a certain percentage of the purchase value. May also be a fixed amount, preferably when it comes to sales from subscriptions. Also called CPO - Cost per Order.
  • Lead - Commission for a complete application, subscription of a newsletter signup or similar. Also called CPA - Cost per Action and are often a fixed amount á conversion.
  • Click - Commission for transferred visitor - a click. More common in the past but also occurs today. Called CPC - Cost per Click.
  • View - Commission for views of advertisements. Are often measured á thousand views and is called CPM - Cost per Mille.

Commission for views are more frequently used in traditional advertising networks, but you can also find it at affiliate networks in some cases. Usually, this is called iSale or Post view sale. This means that an affiliate can get commission on a mediated purchase which takes place after a visitor has seen a banner ad on the affiliates channel. The commission is directly linked to a conversion at the advertiser. The tracking time and commission is usually shorter than for regular sales, since this model is less accurate.

Affiliate marketing is based on performance and results. It is all about trust and relations between advertisers and affiliates. The possibilities for advertisers to gradually increase sales with the help from affiliates makes it both efficient and profitable.

Affiliates may also receive increased revenue based on their personal interest and their online channels.

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