Those who dabble with online marketing or want to get into this very lucrative industry might have come across the concept of affiliate marketing. Basically, affiliate marketing is a form of online promotion where the ads of one business is published on another site that enjoys good traffic inflow and is not related or owned by the business, the ads of which are being published.

Before we get on to more about affiliate marketing, let us clear some of the basic terminologies -

A Merchant is one whose ads are getting published. A merchant is usually one who owns a business or has something to sell or promote. He / she can place an ad for different reasons - for selling or promoting his goods or services, for collecting important data, for leads generation or for getting feedback on his services.

An Affiliate, on the other hand, is one who owns the site where the ads of the merchants get published. Usually an affiliate's site is one that enjoys a reasonably good number of visitors regularly.

Affiliate marketing is a performance driven concept where a merchant has to pay only when a defined goal is accomplished. This goal can be anything that a merchant has to get done, for example getting conversions, accumulating data, leads generation, getting feedback or anything at all. It is when this goal gets accomplished, the merchant pays the affiliate that has brought in the visitor from his site. The amount is fixed at the time of commencement of program.

Affiliate marketing has a lot of benefits for both the merchants as well as the affiliates. For merchants, this reduces the amount that has to be invested for promotion purposes and it also gives more returns on investment. It can also be fruitfully used to get qualified leads or for conversion of visitors into customers.

It is a good money making option for an affiliate since there is no investment or any cost involved. And the affiliate can simply earn by monetizing the web traffic that comes to the site owned by the affiliate. Each time a visitor clicks on an ad shown on his site, the visitor is taken to the destination site of the ad (the merchant's site) where the visitor may perform the activity that has been defined by the merchant. On successfully doing that, the affiliate gets paid a fixed amount by the merchant.

Hence, affiliate marketing is a win-win situation for both the affiliates as well as the merchants and therefore it has gained a lot of popularity from the time of its conceptualization.

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