What is Affiliate Marketing? Complete Guide to Getting Started in 2025

While affiliate marketing might seem like a relic from the early days of digital advertising, the reality tells a dramatically different story. Far from being an outdated marketing strategy, affiliate marketing is experiencing unprecedented growth and evolution.

The industry's numbers are climbing steadily, with participation from a more diverse range of marketers and brands than ever before. Most telling of all? The global affiliate marketing industry is projected to reach a staggering $27.78 billion by 2027¹.

Businesses know that this is one of the few marketing methods where you only pay for actual results, and that's exactly why it stays relevant while gaining more traction.

In this article, we’ll break down what affiliate marketing really is, how it works, who’s involved, and why it’s quietly becoming one of the biggest growth engines online.

What is affiliate marketing?

Affiliate marketing is a performance-based strategy where brands pay third-party partners a commission for driving customers to their business through the partner's own promotional channels, typically tracked through unique referral links. Think of it as businesses saying, “You send people my way; I’ll give you a cut.”

In general, these are the parties involved with the whole affiliate marketing process:

• The brand/business – The seller that sets up the affiliate program, decides the payment terms, and prepares a unique tracking link for each partner. This link tells the system which affiliate generated the sale.
• The affiliate – Also called a partner or publisher. Could be an influencer, blogger, YouTuber, podcaster, or even another business.
• The affiliate network – A middleman that connects brands with affiliates and makes tracking and payouts easier.
• The customer – The one who clicks, buys, and signs up through an affiliate link.

How does affiliate marketing work

First, the business sets things up. They decide the commission, make tracking links, and hand over whatever promotional material the affiliates might need.

Then the affiliates start sharing. This could be a blog post, a quick video, a story on social media, or even an email, but they’ll always drop in their affiliate link that has the tracking code.

If a customer clicks the affiliate link and makes a purchase, it counts as a success. The platform notes the sale and associates it with the right affiliate while keeping both parties informed on whether there were conversions from the affiliate link or not.

If it is a success, the business sends over the commission, and the cycle starts all over again for a new purchase. But that's not the only commission model around. Let us look at the most common models being used by businesses.

Types of affiliate marketing models

Not all affiliate programs pay the same way. Here are some common commission models you might come across:

• Pay-per-sale (PPS) – The affiliate earns a commission only when the customer makes a purchase.
• Pay-per-lead (PPL) – A fixed amount is paid for every sign-up, trial start, or form submission generated.
• Pay-per-click (PPC) – The affiliate is paid for each click on their link, regardless of whether it results in a sale.
• Recurring commissions – The affiliate continues to earn as long as the referred customer keeps paying.

How affiliate marketing drives measurable business growth

Affiliates and influencers powered one-fifth of all U.S. e-commerce sales on Cyber Monday 2024. On top of that, products with affiliate links were six times more likely to be purchased than those without.²

Why? Because people trust someone they follow far more than an ad they didn’t ask to see.

Example: A skincare brand offers beauty YouTubers 10% per sale. One creator does a 30-day review, shows before-and-after shots, and drops their link in the description. A viewer clicks, buys, and the sale is instantly tracked. The creator sees the sale pop up in their dashboard (some even get an email every time) and gets paid at the month’s end. The brand? They’ve reached a new audience and only paid for actual sales.

Affiliates make it easier to convert interest into actual purchases because of the 'pre-built trust' factor. Over time, this approach creates a steady stream of new and returning customers, paving the way for sustainable growth for businesses.

How to start an affiliate marketing program: A step-by-step guide

If you wish to get into affiliate marketing, here’s a simple 5-step guide with examples of programs you can explore at each stage.

1. Pick your platform and style

First thing — decide where you’re actually going to post stuff and what kind of content feels natural for you.

• YouTube is good for long videos, tutorials, or proper reviews where you can show everything.
• Instagram works if you’ve got nice photos, lifestyle shots, or fashion/home ideas.
• TikTok is suitable for short, quick videos — trends, fast tips, or a “this product is great” moment.
• A blog or website might be a good choice for guides, lists, or comparisons.
  Example: A travel blogger does a “Top 10 Hotels in Bali” post and slips in Booking.com or Agoda links.

2. Find a program that fits

Not all affiliate programs are the same. Some have loads of brands under one login, others are direct with just one company.

• Big networks like CJ Affiliate, ShareASale, or Awin can be ideal for connecting with a wide range of affiliates, managing campaigns in one place, and tracking results.
• Direct programs like Apple, Nike, or Sephora are also available — apply to them individually.
• Go for niche ones like Booking.com for travel or Envato if you specialize in a certain field.

3. Choose what to promote

Don’t choose products just for the payout. Pick ones you genuinely recommend and that fit your strengths as a promoter.

• Physical products: Gadgets, clothing, home goods
• Digital products: eBooks, online courses, templates
• Services: Web hosting, design software, consulting

4. Make content that feels real

This could be a blog post, a video, or an Instagram story. Show why it’s useful, mention pros and cons, keep it honest. People trust that more.

• Share your own research or findings.
• Team up with experts for fresh perspectives.
• Test products yourself and give honest reviews.
• Use visuals that explain, not just decorate.
• Keep your tone human and relatable.
• Support claims with data and real examples.
• Tell stories that stick.

And it is always better to tell your customers if it’s an affiliate link.

5. Keep an eye on results

Affiliate dashboards usually show how many people clicked your links, how many bought something, and how much commission you’ve earned. Review these numbers regularly.

If a product is getting clicks but no sales, adjust your approach, change how you present it, or try promoting a different product. Experiment with formats, move links to new spots, and see which setup gets the best results.

Best practices for a successful affiliate marketing strategy

A good affiliate plan goes beyond just joining programs. It’s all about making intentional moves that keep your audience hooked and your sales on the rise. Here are some go-to tips to help you strategize better.

• Choose products that fit your audience. Promoting items that match your niche and audience's needs builds trust and drives higher conversions, making your recommendations more authentic and effective.
• Localise campaigns by market by tailoring offers, language, and timing to each country to increase relevance and sales potential across different regions.
• Manage payments efficiently by opting to get paid in your local currency without extra conversion fees, which means you keep more of your earnings and get access to them faster. By leveraging international business accounts like Wise Business, businesses can send commissions across multiple currencies, ensuring affiliates receive more of their earnings without losing more than needed.
• Keep affiliate links fresh by regularly checking and updating links to prevent broken URLs and lost commissions.
• Use multiple marketing channels by running campaigns across social, search, and email to reduce dependency on one traffic source and maximize your reach.
• Stay transparent and compliant by disclosing affiliate relationships to protect your credibility and maintain trust with your audience.
• Finally, optimise for mobile since over 50% of affiliate traffic comes from mobile devices¹, so mobile-friendly pages and links help capture more conversions.

The part brands don’t talk about much: Paying people

When a brand's growth strategy relies on affiliate marketing, a critical challenge often overlooked is the payment process. The complexities of paying a global network of affiliates can turn a successful program into a logistical nightmare.

Issues like slow bank transfers, high transaction fees, and unfavorable foreign exchange rates can significantly erode an affiliate's earnings. Addressing these payment frictions with a modern, efficient system is essential for any brand looking to scale its affiliate program and maintain strong, lasting relationships with its partners.

Wise Business: All-in-one solution for cross border transactions

That’s where cross-currency payment solutions like Wise Business come into play. Users get access to multi-currency business accounts that enable businesses to send, receive, and hold money in multiple currencies at the mid-market exchange rate. This transparency, combined with low, upfront fees and a streamlined platform, makes it an ideal tool for businesses and freelancers who rely on cross-border transactions, such as paying a global network of affiliates.

Wise Business helps streamline overseas business payments without foreign transaction fees, saving up to 3x compared to other providers.

• Free to register — Send money to 140+ currencies with no hidden exchange rate markups
• Make up to 1,000 transfers at once with the Wise batch payments feature
• Fast, low-cost payouts to customers, freelancers, employees, investors, and suppliers globally
• Automate invoice payments, recurring transfers, and international payroll
• Fast and fully secure payments through Wise, even for large amounts

Tired of hidden fees and complex processes when making overseas payments?

Start sending with a Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

Sources:

1. Affiliate marketing stats
2. Business Insider stats on affiliate marketing