Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate's own marketing efforts. The industry has four core players: the merchant (also known as 'retailer' or 'brand'), the network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as 'the affiliate'), and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors.

In affiliate marketing, an affiliate promotes a company's products or services and earns a commission when a sale or lead is generated. The affiliate uses a unique tracking link to ensure that the sale or lead can be attributed back to them. Some affiliates use referral marketing strategies to promote products, meaning that they encourage others to promote the product on their behalf.

There are several advantages to using affiliate marketing as a business model:

1. Cost-effective: Affiliate marketing can be an affordable way to reach new customers and generate sales, as affiliates are only paid when they generate a sale or lead.

2. Increased brand exposure: Affiliate marketing can help to increase a brand's exposure and reach, as affiliates promote the brand to their own audience.

3. Access to new markets: Affiliates can help a business tap into new markets and reach new customers that they may not have been able to reach on their own.

4. Passive income opportunity: Affiliates can earn a passive income by promoting products and services on their own time and without the need for significant upfront investment.

5. Performance-based: Affiliate marketing is a performance-based model, meaning that affiliates are only paid for the results they produce. This can help to ensure that a business is only paying for actual sales and leads.

6. Flexibility: Affiliate marketing allows affiliates to choose which products or services to promote and when, giving them the flexibility to tailor their efforts to their own interests and audience.

7. Trackable results: Affiliate marketing provides clear, trackable results, making it easy to measure the effectiveness of a campaign and make any necessary adjustments.

Overall, affiliate marketing can be a valuable addition to a business's marketing strategy, helping to increase brand exposure, reach new markets, and generate sales.