An affiliate network acts as an intermediary between publishers and merchant affiliate programs. It allows website publishers to more easily find and participate in affiliate programs which are suitable for their website and allows websites offering affiliate programs to reach a larger audience by promoting their affiliate programs to all of the publishers participating in the affiliate network. 1
Traditional affiliate networks enable merchants to offer publishers a share of any revenue that is generated by the merchant from visitors to the publishers site or a fee for each visitor on the publishers site that completes a specific action . The majority of merchant programs have a revenue share model as opposed to a fee-per-action model. 2
For merchants affiliate network services and benefits may include tracking technology reporting tools payment processing and access to a large base of publishers. For affiliates services and benefits can include simplifying the process of registering for one or more merchant affiliate programs reporting tools and payment aggregation.
Affiliates are generally able to join affiliate networks for free whereas there is generally a fee for merchants to participate. Traditional affiliate networks might charge an initial setup fee and/or a recurring membership fee. It is also common for affiliate networks to charge merchants a percentage of the commissions paid to affiliates.
CPA network
In addition to the traditional networks lead generation and CPA networks also exist. Lead generation networks are typically networks that in addition to performance based promotions also offer CPM- or CPC-based display advertising. CPA networks on the other hand are often so-called "super affiliates" who are themselves affiliates of merchants via the traditional affiliate networks and recruit other affiliates to promote the merchant through them instead of directly via the merchants program at the traditional network.
CPA networks take advantage of the ability to get higher commission rates due to their high volume which they pass in part down to their affiliates. Average affiliates usually get paid a lower commission if they promote the merchant directly because they are rarely able to generate the required volume to reach the higher payout tiers.
References
Affiliate Networks Definition from MarketingTerms.com
AffStat Report 2007 Based on survey responses from almost 200 affiliate managers from a cross-section of the industry
