The hottest thing in Internet marketing today goes by the name, 'affiliate marketing'. If a person has not heard of this term, then he has been away from the Internet for quite a long time. Affiliate marketing is not a new product promotion strategy but it has never faded nor buried under a thick layer of dust and oblivion. Affiliate marketing is considered a relatively effective promotional strategy and this is why it has survived for a long time. But with the evolution of e-commerce and Internet technology, affiliate marketing has flourished.

What exactly is affiliate marketing? Affiliate marketing is a symbiotic relationship between two online companies. One of the online companies is the Affiliate. This affiliate is sometimes referred to as the Publisher. The other online company is either the online Merchant or an Advertiser. The Merchant is the company which manufactures the products or provides the services. The Advertiser is most likely the hired marketing arm of an online company.

The relationship of the two companies is centered on the marketing and selling of the products using the Internet. The Merchant or Advertiser links up with the Affiliate so that there will be more sales. The Affiliate's role is to provide traffic to the website of the Merchant. This is usually done when the Affiliate promotes the products of the Merchant. The Affiliate is paid each time he sends visitor traffic or each time a visitor makes the purchase. Of course, the Merchant is benefited when the visitor buys a product.

To illustrate, here is a specific example: Company A is a manufacturer of a special photo paper, but its main problem is that its website is not visited by enough Internet users. Then, there is Company B, which is a company that specializes in camera products. Company B is visited by lots of customers, but there is a need of its customers that they cannot respond to, and that is about photo paper.

A representative of Company A will then approach Company B and engage the latter company in an affiliate program. This affiliate program is like this: Company A will have a small advertisement in the website of Company B. And each time a visitor of Company B clicks on the link, Company A will pay Company B. Company A is the Merchant while Company B becomes the Affiliate.

The affiliate program benefits both because Company A will have an increase in traffic due to advertising in a niche market, and Company B will be paid, and at the same time, can better help their customers.

In the above example, both companies complement each other. If an online business wanted to have an affiliate program, then it must contact a marketing firm that can professionally match companies that have complementary products.