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An affiliate network is basically an intermediate between publishers and merchant affiliate programs. Affiliate networks help publishers or affiliates as they are commonly known, to easily find out the affiliate programs that will get more traffic and hence more revenue for their websites. This also allows the online merchants to market their affiliate programs to all publishers who are participating in the affiliate networks. It is a mutually beneficial scheme for publishers and online merchants to gather at one place and earn the benefits.

Affiliate networks are based on the concept of revenue sharing that is, they let merchants give a part of revenue produced to him from visitors to the publisher's site. There may also be a fee for each visitor on the site that undertakes and completes a particular action such as making a purchase, or for registering and subscribing for a newsletter or a magazine. But generally revenue sharing is the standard method in comparison to or opposed to a fee-per-action model. Affiliate networks with many advertisers also attract a large pool of the publishers. Big affiliate networks generally do not need to recruit publishers as the publishers usually flock to them on their own. Generally websites that draw in the same kind of customers as the advertisers but without any competition in them are common affiliate network partners.

Affiliate networks have grown rapidly since their inception. Seen as marketing toys in early days of world wide web, they have become an integral part of business plans of many companies around the world. In reality they have been so successful that they have grown into bigger businesses than the existing offline business. The total sales amount generated according to one source by affiliate networks is £2.16 billion in UK by itself for the year 2006. In the same year for the USA the total bounty amounted nearly US $ 6.5 billion.

Affiliate networks are mainly used in variety of sources like retail, gaming and gambling, personal finance, travel, education, telecom and publishing. Traditionally the affiliates are allowed to join the network free of charge while there is generally a nominal fee for the merchants in order to participate. The network also charges the first setup or a membership fee which can be recurring. Although affiliates join for free but they pay a certain percentage of their earnings as compensation to affiliate network.

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

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