Internet based marketing practice is called affiliate marketing where the business rewards its associates or affiliates for bringing visitors or customers through their marketing efforts. Stated simply the concept of paying a third party to increase the number of hits and customers to your web site is known as affiliate marketing. Affiliate marketing network refers to the industry where individuals and companies perform affiliate marketing and it includes affiliate management companies, affiliate networks, in house affiliate managers, various types of affiliates/publishers who produce products and services that glorify their partners and specialized third party vendors. Affiliate marketing is not a radical new concept. In all reality it is a super set of traditional internet marketing methods. Some of the common methods of advertising in affiliate and internet marketing are e-mail marketing, paid search engine marketing, organic and inorganic search engine optimization and display advertising. Besides this affiliate marketers also use unorthodox techniques like publishing reviews, giving demos of the original products and services offered by the web merchant. The usage of one website to promote another or to increase traffic on another website is also another definition of affiliate marketing.

Although potent and extremely efficient it still has a relatively low profile in the world of internet marketing and e-business marketing strategies. Search engines, website syndication and emails continue to be the most commonly used methods to catch the attention of online retailers. One market driving force for affiliate marketing is its “pay for performance” model. This is a proven policy in normal retail businesses and has been a huge success with traditional businessman. The merchants think of it as a win-win situation. The merchant doesn’t incur any expenses until the results are accrued. You have to exclude the initial setup cost in this equation. The biggest example of this

technique is Amazon.com.

There is however one major drawback of this method of advertising. It is not as easily scalable as the traditional display advertising. However with more and more people turning to internet and the continuing trust of people in online transactions has some what overshadowed this drawback. The thought of generating considerable profits coupled with the fact that more and more people are ready to take the plunge in the world of e-business has led to the maturation of affiliate marketing.

Affiliate marketing makes the business more visible in this competitive world and getting noticed is the difference between being on the cover of Forbes and being anonymous. Since affiliate marketing is too burdensome for a single merchant to handle in house, more and more online merchants are going for new affiliate program management companies. These companies have generally been founded by affiliate mangers and network program managers. They provide cost effective solutions or affiliate programs to help merchants and vendors.