Affiliate Marketing has recently come of age and should be strongly considered a viable option for any vendor looking to increase daily conversions and heighten their brand exposure. Although it possesses a rather checkered past, Affiliate Marketing has grown into a cornerstone of many successful digital campaigns.

According to Wikipedia, “Affiliate Marketing is a web-based marketing practice in which a business rewards one or more affiliates for each visitor, subscriber, customer, and/or sale brought about by the affiliate’s marketing efforts.” In layman’s terms, affiliates act as salesmen for the vendor by promoting the vendor’s website. The affiliate then receives a monetary compensation for any sales they generate. Affiliates act as a publisher in many ways as well, by putting banners on relevant affiliate sites and sending traffic through to the vendor’s site. However, affiliate marketing is often called “performance marketing”, referring to the typical affiliate commission structure that is based on this sales-like structure of compensating sales & conversions rather than clicks & impressions.

Affiliate marketing today has matured into a well-respected form of commercial media. This is a drastic change from the early days when a lack of control over industry affiliates was abused by some, leading to a bad name for the entire industry. Affiliate marketing still lacks an overall regulating body; with no legally binding rules and regulations Affiliate marketing can be dangerous waters to navigate.

The rise of Web 2.0 has been essential in shaping the industry into what it is today. In addition to allowing vendors a closer (and much simpler) connection with their affiliates, the rise of new media has led to a self-policing environment. This new environment is more conducive to operational transparency: any questionable activity is made known to the affiliate community and can be halted with much greater speed and efficiency.

The benefits of Affiliate Marketing are numerous. By using a set commission structure based on the concept of Revenue Sharing, vendors maintain a steady ROI creating an affiliate “sales team.” Affiliate marketing also enables a vendor to generate sales for their site from entirely new sources, and offers an unparalleled branding opportunity that can flow back as sales through other marketing channels.

Like many other online marketing practices, Affiliate Marketing/Performance Marketing will not work the same way for every vendor looking to increase conversions. The obvious loss of some control over the brand presence online is the deal breaker for many vendors. The unique branding opportunity and access to a huge network of new salesmen is a convincing argument for the industry on the other hand. There is no doubt, however, that Affiliate Marketing is one of the hottest new approaches to interactive marketing.