What Is Affiliate Marketing? 

Knowing why it exists will give you a better understanding of what it is.

So, why does affiliate marketing exist? Simply put: MONEY.

Businesses exist to make money. But If nobody knows about their products and services, they won’t make much. It's likely that you are familiar with the companies represented above on the left. And it's just as likely that you've never heard of the ones on the right. Yet all of them offer affiliate programs, because even nationally or globally known businesses have new products and services to offer or they want to reach new consumers. And little-known businesses want to become known. Therefore, they all rely on some form of advertising. Collectively, businesses worldwide spend BILLIONS OF DOLLARS every year on advertising! At one time, television, radio, newspapers and magazines were the “go to” resources to promote a business. However, with the development of the internet and the advent of TV recording devices such as TiVo, consumers can watch TV, listen to music, and read newspapers and magazines without seeing or hearing a single ad! So the traditional means of advertising are no longer as effective. Bad news for business …

… GREAT NEWS for consumers! Companies still have huge advertising budgets, and they needed more effective ways to let people know what they have to offer. And that’s where affiliate marketing comes in. By allowing consumers to become affiliates—who can also be customers—and help them promote their products and services through personal websites, email campaigns, blogs, social media and ad placement, businesses get new customers and they and consumers make money!

In summary, affiliate marketing is an active form of advertising for which affiliates are compensated when their efforts generate new customers and revenue for a business.

In Lesson 2, you'll learn the relevant terms you need to know.

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