How does affiliate marketing actually work, and who gets paid for what?
A performance model where a third party — a publisher, creator or comparison site — sends traffic to a merchant and is paid only when a defined action occurs, usually a sale. The mechanics are simple; the disputes are all about attribution.
The chain:
The merchant defines a commission and the actions that earn it.
The affiliate promotes with a tracked link carrying their identifier.
The network or platform hosts the tracking, validates transactions, handles payment and resolves disputes. Some large merchants run programmes in-house instead.
Tracking was historically a cookie set on click, with a cookie window — 24 hours, 30 days — during which a purchase is credited. Signal loss has pushed programmes toward server-to-server tracking and coupon-code attribution.
The commercial models: cost per sale (most common), cost per lead, cost per install, and hybrid or tiered arrangements.
Where the genuine arguments are:
Last-click attribution, which credits the final referrer. This systematically overpays affiliates who intercept at the bottom of the funnel — cashback sites, and coupon sites that a customer visits from the checkout page precisely because they were already buying. The affiliate did not create the sale; they collected it.
Brand bidding, where affiliates buy ads on the merchant's own brand name and capture traffic the merchant would have had free. Most programmes now forbid it, and enforcement is imperfect.
Incrementality, again: the correct question is what would have happened without the affiliate, and the platform's reporting cannot answer it.
Cookie stuffing and other fraud, setting tracking without a genuine click.
What is legally required. Affiliate relationships are advertising, and must be disclosed clearly and prominently — not buried in a footer or hidden behind a hashtag among others. Regulators have acted on this repeatedly, and liability sits with both the creator and the brand.
Content affiliates — genuine reviews and comparisons — are where the model works as intended.