Hackernoon logoThe Technology Behind Affiliate Marketing  by@IngaKakulia

The Technology Behind Affiliate Marketing 

Affiliate marketing has become one of the most widespread and efficient ways to reach wider audiences and to market to the specific target groups. It has often been mislabeled as the marketing tool exclusively for casinos and similar services but it has long surpassed the online gaming community and has expanded into a massive marketing strategy that works on all industries and products.
Despite the fact that then end products, disclosed or not, end up looking pretty simple and easily digestible it's a long winded process that is comprised of multiple levels and technical aspects that you need to know before getting into it. It is a performance-based model that makes the whole experience more reliable and cost-effective. The industry has expanded to such a point that now we even have affiliate programs that operate solely on crypto and cover businesses across all industries.

Performance-based model and tracking links

One of the major perks of this marketing tool is that it is very tangible. You get to see the success rate of the product and how the affiliate marketing contributed to it. The tools that are in use to determine the efficiency of affiliate links is technological. The advertisers get to see who clicks on one of the links or ads and if the content-creator does a good job and the users buy the product or the service offers the affiliate’s account will get a commission, which doubles somewhere between 5-10% of the sale price.
The fact that affiliate programs don’t get compensates based on clicks is because this approach was more vulnerable to fraudulent clicks that could be generated by the software. This is why nowadays the affiliate marketing programs rely on the end results and the number of clicks that ended with the desired result for the company to pay the advertisers their money. Since the sales are tracked via an affiliate link from one website to another.

Pay per lead

A pay per lead is a different way to compensate the affiliate that is based on the conversion leads. While the pay per sale requires the user that clicked on the link to purchase the item, the pay per lead model usually has outlined actions that the consumer should complete after clicking on the affiliate link. It could be subscribing to a newsletter or downloading the files or anything in-between.
It is possible to add multiple values to the query-string parameter section of the URL in order to make the process easier but there are technologies you could use to make the tracking process easier and more efficient.
Utilizing cookies’ on the user’s end is what we call Client-based tracking. Cookies are placed in the user’s browser, later if the user clicks on the add which lands them on the desired page, a conversion pixel will appear if the customer makes the conversion. The pixel will read the cookie information and send it to the system used for tracking conversion. The system registers the conversion and awards an affiliate accordingly.

Server-to-server tracking

Even though the client based tracking is simple enough there is another way that affiliate marketing tracks the sales.
If you have the platform capable of sending postbacks with transaction ID to the conversion tracking system then you can simplify the process by removing the cookies from the equation.
When implementing a server-to-server approach in affiliate marketing. When the user clicks on the ad or the link there are no cookies, instead, the advertise stores the transaction ID. If after getting on the landing page the conversion occurs the system on the advertiser’s landing page will send a  postback to the conversion tracking system.
It is a structural system that might seem intimidating but if you have the necessary technology in place it is manageable. The rise of affiliate marketing was the direct result of the wider adoption of technology and the influence of the internet on everyday consumer choices. 
While the affiliate marketing through influencers has gotten a bad rep, it is largely because unlike advertising agencies, usually, these content creators take less time to get to know the product and don’t focus on the actual company that they’re promoting, hence creating a lot of negative experiences for their supporters. This is part of the reason why the influencer affiliate codes and links are no longer as popular as they used to be. 
Advertising agencies are alert to the fact that affiliate marketing is the tool of the future and the industry has been continuously growing in the United States and Europe. This model is a good fit for the contemporary consumer-advertiser dynamics and is beneficial for both the affiliates and the creators of the products or services. 
While the fraudulent clicks and other cyber-threats are definitely to be considered, it is no riskier than any other traditional marketing strategy. 
Affiliate marketing while relying heavily on technology, isn’t that complicated in terms of technicalities. What takes up a lot of time and effort in networking and building relationships within the industry. People have higher standards for what they consume these days. This also goes for advertisements and affiliate marketing.
The content that promotes these products will often end up being swept under the rug because of the low quality and bad execution, which will, in the end, generate way less income for the advertisers. This is why this strategy works on growing industries on both ends. 
This model holds advertisers and affiliates accountable and creates a more balanced dynamic between a consumer, a marketer and the product developer. Hence the spike in its popularity in recent years and the impressive success rate.
Affiliate marketing, even though experiencing some shifts like the ones about disclosing the affiliate content, is definitely here to stay. It will likely continue to adapt to the customer needs and request but the general model seems to work for every side involved. 
The change also touched on the way the affiliate programs chose in which cases they to pay the advertiser but in the end, all the changes are accounting for the better overall experience and that has been evident by the growing success rates of this model.

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