Affiliate marketing is a very popular method of online marketing that utilizes millions of websites. It works by having an associate create links that point back to the merchant's web site. The merchant will pay the affiliate web site owner a small fee every time that a web user clicks on the link.

Some marketing programs require for the internet user to actually make a purchase before paying the affiliate webmaster. As consumer confidence in online commerce continues to increase, expect to see more companies make use of affiliate promotion and related marketing techniques.

This type of marketing is an effective method for merchants to grow their online presence and it also allows webmasters and bloggers to use their page to generate multiple streams of income. Once the program is set up, the process is basically lights out for the online marketer.

Many programs encourage their affiliate marketing web masters to recruit additional web masters by offering a hierarchical compensation approach. For such marketing programs, the affiliate web owner who referred another one receives a fee both when an internet user clicks on one of their own links and when a user clicks on one of the affiliate marketing links of the web master that they
referred.

Affiliate marketing has led to the increase of an unfortunate internet tactic often referred to as "spamdexing." Spamdexing involves companies that flood the internet with computer generated websites that feature a few words and back links to their affiliate web site. This is done in an attempt to increase the search engine ranking of their affiliate web site since many search engines rate sites more highly if they have a large number of one way back links to their site. The major search engine optimization companies have been working to update
their algorithms to remove such web sites from their master index.

There are a number of different compensation methods used in affiliate marketing. One method is name pay per impression and results in the affiliate marketing web master receiving a fee every time the affiliate marketing link appears on the web site. This method is not commonly used since it requires the merchant to pay even when the affiliate marketing link was not used. A more common method is pay per click, in
which the affiliate marketing web master receives a fee only when a web surfer clicks on the affiliate link. Another compensation method that

is increasingly seen is pay per sale, in which the affiliate is compensated only when someone clicks on the link and actually makes a purchase with the merchant.