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Affiliate Marketing is an incredibly inexpensive and effective way to grow a business, and (depending on the type) has an incredibly low-risk factor for business.

In a nutshell, Affiliate Marketing is a way of promoting on-line and web business through affiliates (or publishers.) The affiliate is rewarded for every customer, visitor, subscriber, or sale that is the result of their efforts and advertising. It's a way of empowering other websites to market your business through their own channels (internet, e-mail etc.)

Affiliate Marketing is often confused with Multi-Level-Marketing (MLM), so some companies prefer to use the term 'performance marketing' to limit this confusion. MLM and Affiliate Marketing are simply not the same thing, as MLM is based on an entirely different system. Affiliate Marketing is basically a form of advertising and commission, but the affiliate does not move or sell the product. They merely advertise and are rewarded according to their efforts based on the merchant's parameters. While there are many multi-tier programs of Network Marketing that use Affiliate Marketing in their program, these are strictly not considered as Affiliate Marketing.

So, what are these types and their differences?

Simply put, in the early days of the internet, Cost-Per-Click (CPC) was the general program used. This is when the affiliate only needs to display banners on their website, or send out emails, advertising the product or merchant. Every time a click on a banner or link in the email happens, a redirect to the merchant's website happens. The merchant then pays the affiliate a certain amount of money for every 'click.'

Google's AdSense program is an example of this kind of Affiliate Marketing, however it's not entirely the same, as AdSense is more contextual advertising (only displays adverts that relate to the website they are displayed.)

Because CPC could so easily be manipulated, spam sites and emails became prevalent amongst many unethical affiliates, as well as click fraud and other issues. This has resulted in only 1% of the on-line market using CPC these days.

The other types of Affiliate Marketing are CPS (Cost-Per-Sale) and CPA (Cost-Per-Action.) Basically, the affiliate is only rewarded with a commission when the advert they have generated ends in a sale (CPS), or a subscription or lead (CPA.) This can be very rewarding for the affiliate, especially if the customer buys a fairly expensive product, or high quantities. 80% of the market currently uses the CPS system, whereas 19% use the CPA system.

The wonderful thing for merchants on CPS and CPA is that they actually take no risk. The risk now lies with the advertiser or affiliate. And, since this form of marketing is usually just in the form of displaying adverts on the affiliate's website, there is very little (if at all) risk involved.

Because of the success of early companies like Amazon.com and CDNOW using Affiliate Marketing, proving its high efficiency, it has now become an integrated part of business plans - not just for e-commerce - but for all types of business.

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Affiliate marketing is catching on in a big way and many folks are making money via the same. Like in every venture there are a lot of things to be learned and experienced, money just does not fall into one's lap without any efforts. For someone new, affiliate marketing may seem a bit difficult in the beginning but if one is open to learning and trying out new things then there is nothing like it.

There are now secrets as such but always remember that hard work and sincerity always pay off in the long run. Affiliate marketing can be defined as a venture that involves the sharing of revenue between an online merchant and a website owner. The role of the website owner is to post advertisements on his or her website which helps the online merchant to sell his products as well as direct potential customers to the website; it is a two way benefit and a fair exchange as well.

There are three ways to make money via affiliate marketing these are pay per sale wherein each time a sale is made on the affiliate's website as a result of advertising a commission or certain percentage is put into the affiliate's account. Then there is the pay per lead way where a potential client registers on a merchant's website because of the advertisement, a previously agreed upon amount is then deposited into the account of the affiliate. Lastly there is the pay per click way, in this the affiliate gets a commission depending on the product, each time a customer leaves the affiliate website and gets on to the merchant's website by clicking a link a certain amount gets deposited into the affiliate's account. The amount deposited into the affiliate's account is normally insignificant but when calculated on a broader basis then it is a different ball game altogether.

Website owners can earn extra money without expending any energy; all they have to do is allow the affiliate to post an advertisement on the website of the affiliate, promotion or selling is not involved. The affiliate can lean back with arms folded and watch the money begin to roll in, the more the websites the merchant is affiliated with the more the money, and he has nothing to lose as his products are getting all the exposure needed. As good as it seems there are a few downsides to affiliate marketing; it is advisable that an affiliate do a little backtracking of the website owner and vice versa.

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