What is Affiliate Marketing?

Definition – A marketing arrangement by which an online retailer pays commission to an external website for traffic or sales generated from its referrals.

You simply sign up as an affiliate for any company, business, or firm that proposes to advertise its services or products via affiliates, or the people who market for them by various means.

In return, the affiliate earns a small commission every time their referral is successful.

As the brand doesn’t do marketing but lends the people the power of marketing, multiple times new and creative ideas are formed by various people to promote their referral links.

Where is this used and why is it so successful?

Influencers use this technique all the time. As they already have large audiences who follow and get influenced by the star’s activities, it gets really easy for the influencers to earn money.

Where is this used?

Multiple times, a brand holds on the influencers like these and calls them the “Brand ambassadors”. These influencers stay as the brand’s best affiliate and earn a higher commission as larger audiences react and engage with these stars.

We have seen multiple ads where you see one of the leading actors of the nation, Salman Khan, holding and participating in the ads of Pepsi. The brand not only pays him for the advertisement he did but also sets him up with a contract whereby any sales are made by the promotion of his activities, he will earn a commission for a specific period.

What it means is that, during a particular period, Pepsi held Salman khan as its affiliate and any sales made by Salman khan earned him a commission. That’s the only reason we see Salman khan holding a bottle of Pepsi in multiple movies and ads as it profits both him and the brand

Why is it so successful?

As the initial marketing cost of the brands is cut down by giving the main marketing and promotion power to the people, it benefits the brand in much larger terms.

People also show interest in this marketing form as they get paid for promotion, which is earning with no investment at all. Anyone can start referral marketing as long as they have the means to promote and advertise the link they are given.

Conclusion

In simple terms, A business creates a platform where people can sign up and become affiliates of the company who will promote the brand and shall receive a commission in return.