Affiliate Marketing Masterclass

If you recommend a restaurant to a friend, and that friend visits the restaurant because of your recommendation, the restaurant’s revenue will have increased because of your referral. This is “word of mouth” marketing. But you, as the referrer, do not see any of the cash benefit that the restaurant does!

Imagine that the restaurant gave you 10% of the bill for every person that you referred to the restaurant. They would be paying you a finder’s fee for new customers. There are a number of businesses that market this way offline. Brokers for insurance products are an example, but these referrals can be hard to track. Online, they are very easy to track. This system of reward where compensation is based on referral is called affiliate marketing, and is used to describe this type of marketing in an online environment.

Affiliate marketing is used widely to promote web sites, and affiliates are rewarded for every visitor, subscriber or customer provided through their efforts. Because of this, affiliates are sometimes viewed as an extended sales force for a web site.

Affiliates are paid for performance, so affiliate marketing is also referred to as performance marketing.