An affiliate network is basically an intermediate between publishers and merchant affiliate programs. Affiliate networks help publishers or affiliates as they are usually known, to easily know the affiliate programs that will get more traffic and hence more revenue for their web sites. It also allows the online merchants to advertise 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 get together at one place and earn the benefits.

Affiliate networks are based on the idea of revenue sharing that is, they let merchants offer 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 certain action such as making a purchase, or for registering and subscribing for a newsletter or a magazine. But usually revenue sharing is the common method compared 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 hire publishers as the publishers usually flock to them on their own. Typically websites that attract the same kind of customers as the advertisers but without any competition in them are typical 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 important part of business plans of many organizations 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 produced 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 overall bounty amounted close to US $ 6.5 billion.

Affiliate networks are mostly used in variety of sources like retail, gaming and gambling, personal finance, travel, education, telecom and publishing. Traditionally the affiliates are welcome to join the network free of charge while there is generally a minimal fee for the merchants 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 income as compensation to affiliate network.

Affiliate networks are a large conglomeration of publishers and suppliers working towards a common goal; 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 bring in services and benefits such as affiliate programs, reporting tools and payment aggregation by using the network.

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