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An affiliate program is a form of advertising, on the web, that rewards the affiliates (self-selected advertisers) for driving traffic to the advertiser (CTR) or for subsequent transactions (CPA). An affiliate program uses a multi-level marketing concept where consumers (affiliates) attract additional consumers. Some affiliate programs are multi-tiered, thus increasing the income earning opportunities for the affiliates (rewarded for their traffic and the traffic of affiliates they recruit). Marketers have the option of developing their own in-house affiliate program (Amazon.com and bn.com are examples) or joining one or more of the large affiliate networks (Beefree, Linkshare or CommissionJunction). Affiliates have the potential to earn significant money, if done correctly. This book store is the author's example of an Amazon affiliate. Marketing vehicles may sign up for an affiliate program to use its excess advertising inventory (unsold banners).
It can also be defined as an automated marketing program where a Web merchant recruit webmasters to place the merchant's banner ads or buttons on their own Web site. Webmasters will receive a referral fee or commission from sales when the customer has clicked the affiliate link to get to the merchant's Web site to make the purchase.