Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's own marketing efforts. Examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site. The industry has four core players: the merchant (also known as 'retailer' or 'brand'), the network, the publisher (also known as 'the affiliate'), and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors.
Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization, paid search engine marketing, e-mail marketing, and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
Affiliate marketing—using one website to drive traffic to another—is a form of online marketing, which is frequently overlooked by advertisers. While search engines, e-mail, and website syndication capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers' marketing strategies.In 2011, the FTC began more strict enforcement of its guidelines for online blogging, social media and affiliate marketing by suing companies that were violating provisions of the law. Actions against Legacy Learning Systems and Acai Berry sent the message to all affiliate marketers that the FTC is “raising the bar” on disclosure. All affiliate marketers are expected to be in compliance with FTC guidelines.
If you are considering setting up an affiliate marketing program for you Online or E-Commerce business, please don't hesitate to contact an Internet Lawyer to ensure that you are following all of the necessary guidelines.