An affiliate network is essentially an intermediate amongst publishers and merchant affiliate programs. Affiliate networks assist publishers or affiliates as they are typically known, to easily know the affiliate programs that will get more traffic and hence more income for their websites. This also allows the online merchants to promote their affiliate programs to all publishers who are taking part in the affiliate networks. It is an equally helpful scheme for publishers and online merchants to get together at one place and earn the benefits.

Affiliate networks are based mostly on the concept of revenue sharing that is, they let merchants give a part of revenue generated to him from traffic to the publisher's website. There might be a fee for each visitor on the site that undertakes and completes a certain action such as making a purchase, or for signing up and subscribing for a newsletter or a magazine. But generally revenue sharing is the standard method as compared to or contrary to a fee-per-action model. Affiliate networks with many advertisers also draw in a large group of the publishers. Big affiliate networks generally do not need to hire publishers as the publishers usually head to them on their own. Generally websites that draw in the same kind of target audience as the advertisers but without any competition in them are common affiliate network associates.

Affiliate networks have grown very quickly since their inception. Regarded as marketing toys in early days of world wide web, they have develop into an integral part of business plans of many companies around the world. In fact they have been so profitable that they have grown into larger businesses than the present offline business. The total sales amount produced according to one source by affiliate networks is £2.16 billion in UK by itself for the year 2006. And In the same year for the USA the total bounty amounted nearly US $ 6.5 billion.

Affiliate networks are primarily used in assortment of sources like retail, gaming as well as gambling, personal finance, travel, education, telecom and also publishing. Traditionally the affiliates are welcome to join the network free of charge while there is mostly a nominal fee for the merchants in order to participate. The network also charges an initial setup or a membership fee which are recurring. Even though affiliates join free of charge, but they pay a certain percentage of their income as compensation to affiliate network.

Affiliate networks are a huge conglomeration of publishers and merchants working towards a common objective; profit realization. Merchants derive benefits like tracking technology, payment processing, reporting tools as well as a large group of publishers out of the affiliate network. On the other hand, affiliates bring in services and benefits such as affiliate programs, reporting tools and also payment aggregation using the network.

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