Affiliate systems are internet-based sales systems in which a merchant or advertiser usually offers commissions to its affiliates or publishers. The product provider provides advertising material that the affiliate uses on its websites or can use via other channels such as keyword advertising or email marketing.
Affiliate systems are based on the principle of referral commission. The technical basis in the virtual world of the World Wide Web is the link. Such an affiliate link contains a special code that uniquely identifies the affiliate with the merchant. To put it simply, this means that the link with the partner ID allows the retailer to see who sent the customer. Depending on the business model, a commission is calculated for the pure clicks on the advertising material, the transmission of qualified customer contacts or the sale. In contrast to the merchant, who offers goods or services, the affiliate merely acts as an interface between merchants and potential customers.
So if someone clicks on such an affiliate link, they will be redirected to the page of the corresponding retailer. In this case, parameters are transferred that enable the specific allocation of the generated revenue by a publisher. This method is called tracking. For example, cookie tracking makes it possible to assign and track a visitor based on a cookie. The cookie stored on the visitor’s hard drive thus enables subsequent recognition and tracking (even in the case of time-delayed and interrupted interactivity). Tracking using cookies is the most commonly used method in affiliate marketing to match a person to that affiliate.
With affiliate marketing systems in online cooperation management, companies market their products and services by linking to partner websites. Commissions are often paid for generated revenue or measurable success. This can be an advantage for the product provider, but also a disadvantage for the provider of the advertising space, since the business risk of the product provider is transferred to a not inconsiderable extent to the advertising space provider, depending on the choice of the condition model. Since the inventory of the advertising space provider cannot be increased indefinitely, he will consider beforehand with which affiliate program he expects the best results. This puts pressure on the product provider to find a fair billing model.
In principle, affiliate marketing can initially be implemented without the Internet (“offline”). This can be done by using printed coupons that contain a code to identify the publishers. Compensation is paid either as a pay per lead or pay per sale. Further processing is then usually carried out online again.