Affiliate Network

What Is an Affiliate Network?

An affiliate network is a group of associated (or affiliated) companies that sometimes offer compatible or complementary products and will often pass leads to each other. At times, affiliated companies may not operate in the same industry. They may offer cross-promotional deals, encouraging clients who have utilized their services to look into the services offered by an affiliate. A company looking to acquire new customers will pay members of its affiliate network for the sales leads that they provide.

Affiliate networks can help businesses build a database of contact information of potential customers.

Understanding Affiliate Networks

Companies use affiliate networks if they do not have the available resources to create a significant outbound sales effort, if they do not have a substantial advertising presence or if they want to tap into groups of potential customers in an unrelated industry. Affiliate networks can allow a business to focus on its core competencies rather than on obtaining the contact information of interested parties.

Example of an Affiliate Network

For example, Dave's Collision, Mike's Tire, and Andy's Attorney Services are an affiliate network. All of the business owners know each other and are confident the others are experts in their field and treat clients fairly. Although they offer different services, they are potentially related services, creating an opportunity for sales leads or business referrals to be passed between the businesses. Somebody who comes to Dave's Collision may have been in an accident and may need new tires or could be injured and require the services of an attorney.

Special Considerations

In the online world, an affiliate network consists of brands that team up with third-party online sales channels to promote their goods and services. These affiliate networks typically work through a system of link sharing. Members share links to other members' products and a small commission for sales or web traffic is generated by their content when sales are made.

Unlike standard online ads, brands participating in affiliate networks are not responsible for producing the ad content. Rather, the affiliates create the content themselves. As a brand, companies are obliged to make their affiliate marketing program as attractive as possible.

There is a wide range of partners that can fall under the affiliate marketing umbrella, which makes building a reliable and relevant network an important priority for today’s brands. This starts with paying a quality commission rate; and what is deemed a fair rate will typically vary by industry.

A successful affiliate network creates a win-win situation for all parties involved. Many organizations might dip their toe in to explore a secondary source of income, or they may go all in, with the goal of seeing their affiliate network become a primary income stream. 

Affiliate networks work. According to a survey by the Forrester Group, a massive 81% of advertisers use them as part of their marketing. The reason is that online consumers have become more critical of online content. As such, they've increasingly come to value content offering what they perceive gives them the greatest relevance and engagement.