Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates
for each visitor or customer brought about by the affiliate's own
marketing efforts. The industry has four core players: the merchant
(also known as 'retailer' or 'brand'), the network
(that contains offers for the affiliate to choose from and also takes
care of the payments), the publisher (also known as 'the affiliate'),
and the customer. The market has grown in complexity to warrant a
secondary tier of players, including affiliate management agencies,
super-affiliates and specialized third party vendors.
Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC - Pay Per Click), e-mail marketing, and in some sense display advertising.
On the other hand, affiliates sometimes use less orthodox techniques,
such as publishing reviews of products or services offered by a partner.
Affiliate marketing is commonly confused with referral marketing, as both forms of marketing use third parties to drive sales to the retailer.
However, both are distinct forms of marketing and the main difference
between them is that affiliate marketing relies purely on financial
motivations to drive sales while referral marketing relies on trust and
personal relationships to drive sales.
Affiliate marketing is frequently overlooked by advertisers. While search engines, e-mail, and website syndication
capture much of the attention of online retailers, affiliate marketing
carries a much lower profile. Still, affiliates continue to play a
significant role in e-retailers' marketing strategies.
Source: http://en.wikipedia.org/wiki/Affiliate_marketing#History
