How affiliate marketing worksHow affiliate marketing works

If you run paid search, you know how a sale starts: a search, a keyword, an ad, a click you paid for. Affiliate marketing reaches the same sale by another road. The brand doesn't pay for the click. It pays a commission on the sale, and only to the partner who gets the credit for it.

If you run an affiliate programme, you know the partners, the rates and the monthly invoice, and Google Ads is somebody else's account. This lesson sets out the whole model for both of you.

Who's involved

Four kinds of business meet in every programme.

The brand

The shop that sells the goods and pays for the sales. Networks call it the advertiser. Google Ads calls anyone who buys ads an advertiser, affiliates included, which is why this course says “the advertiser Google names” for whoever Google lists in “About this advertiser”. That can be you, or someone else.

The network

The business in the middle, the affiliate network. It hosts the programme, gives each publisher its tracking links, records clicks and sales, holds the terms, and usually handles the money: it invoices the brand and pays the publishers.

Publishers

Everyone who sends shoppers to the brand for commission. Brands often call them affiliates or partners.

Agencies

Firms working for either side. A brand's affiliate agency may run the programme day to day: approving publishers, agreeing rates, checking sales. Paid search may be run by another agency, or a team in-house. On the publisher side, an agency can manage a group of influencers or sites.

Publishers come in many shapes:

• Content and review sites, which write about products and link to the shop.
• Cashback and loyalty sites, which pass part of their commission back to their members as cash or points.
• Voucher sites, which list discount codes and deals for each shop.
• Coupon extensions, browser add-ons that offer codes when a shopper reaches a checkout.
• Influencers, who share links and codes with their followers.
• Comparison sites, which line up products or prices from several shops.
• Sub-networks, which join a programme as one publisher with their own publishers behind them.
• Publishers who run paid search: they buy ads on Google and send the clicks through their tracking link.

A sub-network joins your programme as a single publisher. Its members join it, not your network, and usually give up part of their commission to it. You approve the sub-network but don't vet each site behind it, and a publisher you've removed can come back in through one. Behind the network shows how to see through that layer.

What a programme is

A programme is the brand's standing offer to publishers: what it pays, for what, and under which rules. Publishers apply, the brand or its agency approves or declines each one, and approved publishers get their links.

The rules are the programme's terms, and they usually cover:

• Paid search. Whether a publisher may buy search ads, and on which words. Restricted keyword lists usually include the brand, its misspellings, the brand plus other words and the brand's web address. Some terms also require the brand as a negative keyword in all paid search.
• Brand plus voucher terms. Searches like “yourbrand discount code” or “yourbrand promo code” are often named on their own line. A shopper searching for a code can already have a full basket.
• Direct linking. Sending an ad's click straight to the brand's site, instead of to a page of the publisher's own, and showing the brand's domain as the ad's display URL. Terms can rule out both unless the brand gives permission.
• Codes. Which discount codes a publisher may share. Terms can limit a publisher to codes issued to it, and keep codes meant for your own customers, such as a welcome code, out of public lists.
• Territories. Which countries a publisher may promote the brand in.
• Sub-networks. Whether they may join, and whether they answer for their own publishers.
• Consequences. What happens to activity outside the terms: commission declined, suspension or removal.

Two words in the paid-search clause matter more than they look. “Bid on” covers the keywords a publisher chooses. “Appear on” also covers every search Google matches them to. Close variants (misspellings, plurals, synonyms) apply to every match type and can't be switched off, so those searches can be wider than anything the publisher typed. Brand search and your terms takes the wording clause by clause.

Google pays attention to these terms too. Its Unfair advantage policy lists affiliates who advertise on Google Ads against their programme's rules, and Google warns at least seven days before suspending an account under it. Google doesn't restrict trade marks used as keywords, so your terms do work a trade mark can't.

Terms only work if the publisher has them. A publisher that joined years ago may have agreed to an older version, and a sub-network's members may never have read yours at all. When you change your terms, ask your network how and when the change reaches every publisher.

How the money moves

The brand pays commission on each sale a publisher is credited with. It's usually a percentage of the order value, sometimes a fixed amount per sale, and it can differ from one publisher to another.

Many networks also charge the brand a fee on top of the commission. How it's worked out varies by contract, so read yours. Put together, commission and fee are what a credited sale costs you. Imagine a forty pound order at five per cent commission, with a network fee of thirty per cent of the commission:

The cost is the same whether the publisher found you a new customer or reached one who was already about to buy. That's why the rules on credit, below, matter as much as the rate.

A credited sale then moves through stages, under one name or another:

• Pending: the network has tracked the sale, and the commission waits for the brand's decision.
• Validated, or approved: the brand confirms the sale stands. Returns, cancellations and sales outside the terms come out first.
• Declined: the brand rejects the commission, with a reason the network accepts.
• Paid: the brand pays the network's invoice, and the network pays the publisher.

The decision has a deadline, the validation window (some networks call it a recall or lock period). When it ends, pending sales are approved automatically or locked, and the commission can't be changed. Windows in network documentation run from about 30 to 67 days, and commission that has been paid rarely comes back. How a sale gets credited shows where that deadline sits.

Who gets the credit

A shopper can meet several publishers before they buy: a review on Sunday, a cashback site on Tuesday, a voucher site on the evening they check out. Usually only one of them is paid, and the programme's attribution rules decide which.

In many programmes the rule is last click: the commission goes to the last eligible affiliate click before the sale, so a later eligible click from another publisher takes the credit from an earlier one. Your programme's rules may differ. Most of this course assumes last click.

The cookie window is how long after a click a sale can still be credited to it, set in the programme's terms, usually in days. With a thirty-day window, imagined here, a click on the 1st can still earn commission on an order on the 20th, unless a later eligible click takes its place.

Your affiliate programme isn't the only thing claiming that sale. The same shopper may have clicked your own brand ad or opened your email. De-duplication is how a programme handles a sale another channel also touched: some brands pass the network a value with each sale saying which channel won under their rules, so no commission is due when it wasn't an affiliate. Ask your network and your agency whether yours does, and by which rule.

Your analytics keeps its own account of the same sale. GA4 only files a session in its Affiliates channel when the session's medium is affiliate, so your network's report and GA4 can describe one order in two different ways.

This is why the course spends so long on the last click. Credit goes to whoever came last, not whoever did the most. A click at the very end of a purchase (on a search for your name, a search for a code, a checkout page) can be credited with a sale that was already on its way. Often that's exactly what the brand chose. Sometimes it's outside what the terms allow. The difference is in where the click came from.

Why brands use affiliates

None of this is a reason to distrust affiliates. A brand pays for sales rather than reach. Review sites introduce it to new people, cashback and loyalty sites bring members back, voucher sites and extensions can help a hesitant shopper finish, and influencers reach audiences an ad account can't easily buy. The network gives the brand one contract, one invoice and one set of terms for every partner.

Most of what affiliates do is exactly what the brand agreed. A voucher site listing your public code, a cashback site paying its members, a publisher bidding on generic terms your programme allows: all inside the terms, all working as designed.

When something does look unexpected, the ordinary explanations come first: an approved partner, your own agency, a reseller, another team at your company, terms that were never sent to a publisher, an old campaign still running, a sub-network's publisher who didn't know the rules, or a plain mistake. What to do is the same every time. Look, record what you saw, compare it with your own records, and ask the network or the partner a specific question.

Where the course goes next

How a sale gets credited follows one click from the ad to the commission, including what Google Ads does with a tracking template. Brand search and your terms covers searches for your own name and the wording that protects them.

Then come the eight films of “How it happens”, each with a lesson that goes further than the film can: Looks like yours, Out of hours, Not where you are, Only some clicks, Round the edges, New name, same ad, Behind the network and What you can do. Aware, not accusing and the glossary close the course.

If you'd like to see which advertisers show ads on your brand's searches on Google UK, check your brand.