How Affiliate Marketing Works

Within this example a 'advertiser' is an online advertiser with a transactional website where you can buy products or services. An 'affiliate' is an online publisher or partner who has access to traffic.

Publishers are traditionally website owners who can send traffic, via links to your site. They do this on the basis that any sales generated from this traffic will 

earn them an agreed commission. This reward model is commonly known as Cost Per Action (CPA) and is more transparent and accountable than the older Cost Per Click (CPC) model.

In 2014 online spending in the UK exceeded £100 billion for the first time – reaching £104 billion. This was up by 14% on the previous year. E-Retail now accounts for an estimated 24% of the total retail market*

Adgild Hop, Head of Retail Consulting at Cap Gemini commented “2014 has 

been an important milestone for the online retail sector, with the £100 billion mark being exceeded for the first time. When we consider that almost £1 in 

every £4 is now spent online, and that a large proportion of the other £3 is influenced by some form of digital interaction, it becomes very clear that retailers need to continue to embrace the opportunity that e-retail poses.”

Affiliate marketing saw some impressive results. The third IAB Performance marketing study in conjunction with PWC uncovered that 4,000 advertisers 

spent £1.1 billion across 12,000 publishers in 2014. This was an 8% increase in spend on 2013 figures and a 95% increase from 2008.