- In the case of cost per click, the publisher is not concerned about whether a visitor is a member of the audience that the advertiser tries to attract and is able to convert, because at this point the publisher has already earned his commission. This leaves the greater, and, in case of cost per mille, the full risk and loss (if the visitor cannot be converted) to the advertiser.
- Cost per action/sale methods require that referred visitors do more than visit the advertiser's website before the affiliate receives a commission. The advertiser must convert that visitor first. It is in the best interest of the affiliate to send the most closely targeted traffic to the advertiser as possible to increase the chance of a conversion. The risk and loss are shared between the affiliate and the advertiser.
- Affiliate marketing is also called "performance marketing", in reference to how sales employees are typically being compensated. Such employees are typically paid a commission for each sale they close, and sometimes are paid performance incentives for exceeding objectives. Affiliates are not employed by the advertiser whose products or services they promote, but the compensation models applied to affiliate marketing are very similar to the ones used for people in the advertisers' internal sales department.
- The phrase, "Affiliates are an extended sales force for your business", which is often used to explain affiliate marketing, is not completely accurate. The primary difference between the two is that affiliate marketers provide little if any influence on a possible prospect in the conversion process once that prospect is directed to the advertiser's website. The sales team of the advertiser, however, does have the control and influence up to the point where the prospect either a) signs the contract, or b) completes the purchase.
Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate's own marketing efforts.
Types of Affiliate websites
Affiliate websites are often categorized by merchants (advertisers) and affiliate networks. There are currently no industry-wide standards for the categorization. The following types of websites are generic, yet are commonly understood and used by affiliate marketers.
- Search affiliates that utilize pay per click search engines to promote the advertisers' offers (i.e., search arbitrage)
- Price comparison service websites and directories
- Loyalty websites, typically characterized by providing a reward or incentive system for purchases via points, miles, cash back
- Cause Related Marketing sites that offer charitable donations
- Coupon and rebate websites that focus on sales promotions
- Content and niche market websites, including product review sites
- Personal websites
- Weblogs and websites syndication feeds
- E-mail marketing list affiliates (i.e., owners of large opt-in -mail lists that typically employ e-mail drip marketing) and newsletter list affiliates, which are typically more content-heavy
- Registration path or co-registration affiliates who include offers from other merchants during the registration process on their own website
- Shopping directories that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updates
- Cost per action networks (i.e., top-tier affiliates) that expose offers from the advertiser with which they are affiliated with their own network of affiliates
- Websites using adbars (e.g. AdSense) to display context-sensitive advertising for products on the site
- Virtual currency that offers advertising views in exchange for a handout of virtual currency in a game or other virtual platform.
- File-Sharing: Web sites that host directories of music, movies, games and other software. Users upload content to file-hosting sites and then post descriptions of the material and their download links on directory sites. Uploaders are paid by the file-hosting sites based on the number of times their files are downloaded. The file-hosting sites sell premium download access to the files to the general public. The websites that host the directory services sell advertising and do not host the files themselves.
- Video sharing websites: YouTube videos are often utilized by affiliates to do affiliate marketing. A person would create a video and place a link to the affiliate product they are promoting in the video itself and within the description.
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