What defines affiliate marketing?

Affiliate marketing is fundamentally defined as a performance-based model where individuals or businesses (affiliates) earn a commission for promoting another company's products or services. This arrangement is rooted in the idea of performance — affiliates are only compensated when their marketing efforts result in a tangible outcome, such as a sale or a lead. This makes it an attractive strategy for both the companies who want to drive sales and the affiliates who seek to earn income through their promotional activities.

In this model, the key attributes include tracking, which allows businesses to measure the effectiveness of affiliates, and the shared risk, as affiliates only get paid when they successfully drive results. This creates a symbiotic relationship where both parties are incentivized to succeed. The performance-based nature of affiliate marketing distinguishes it from other marketing strategies, as it relies on measurable outcomes rather than just ad placements or promotional efforts.

The other options do not capture the essence of affiliate marketing. While companies paying for ad placements relates more to traditional advertising, direct marketing through emails does not inherently involve a commission structure tied to performance. Subscription-based sales models are defined by ongoing payments for access to a product or service, which is distinct from the transactional nature of affiliate marketing.