GlossaryGrowth & analytics
What is an affiliate program?
Also called: affiliate marketing, affiliate links, partner program
Definition
An affiliate program pays outside partners, such as bloggers, creators, newsletters and consultants, a commission for customers they refer through tracked links, so you pay for results instead of attention.
Affiliate program, explained
The appeal is that you pay only when a referral turns into a customer. Affiliates who already have your audience, like a YouTuber reviewing tools or a consultant recommending software to clients, can bring well-qualified customers without upfront spend. SaaS affiliate programs commonly pay a percentage of revenue, sometimes recurring for a period.
Running one well takes more than sign-up software. Recruit affiliates whose audience matches your ICP, not just anyone who applies. Give them what they need: a clear pitch, assets, a demo account, and honest answers about what the product does and doesn't do. Set rules on paid ads bidding on your brand name, coupon sites, and misleading claims, and enforce them.
Disclosure rules apply. The FTC's guidance says endorsers must disclose material connections, including financial relationships, clearly and where people will see them, not buried on an about page or after a "more" click. Its FAQ is specific that someone earning affiliate commissions should disclose the relationship, for example both in a video and near the links. Put these requirements in your affiliate terms.
Search rules apply too. An affiliate link is a paid placement, and Google's guidance on qualifying outbound links says paid placements should be marked rel="sponsored". Its spam policies also describe thin affiliate pages, copied product descriptions with no original value, as spam, while noting that good affiliate content adds value through original reviews, testing, comparisons and extra information.
Watch quality, not just volume. Track refunds, churn and activation by affiliate. A partner who sends many sign-ups that cancel quickly is costing you.
Why it matters for founders
Affiliates can bring customers from trusted voices at a cost you only pay on results. Done without disclosure rules or quality checks, they can bring churn and compliance problems instead.
Example
A design-tool startup recruits 30 designers with YouTube channels, pays 30% of revenue for a year, requires clear disclosure in every video, and tracks churn per affiliate. Five affiliates bring most of the retained customers.
Common mistakes
- Accepting every affiliate regardless of audience fit.
- Not requiring clear disclosure from affiliates.
- Paying on sign-ups without tracking churn and refunds.
Sources
- FTC: Disclosures 101 for social media influencers
- FTC: Endorsement Guides, what people are asking
- Google Search Central: Qualify your outbound links
- Google Search Central: Spam policies for Google web search
Checked
Related terms
- Referral programA referral program rewards existing customers or users for bringing in new ones, typically with credit, discounts, extra features or cash, often giving both the referrer and the new customer something.
- Paid links (sponsored links)Paid links are links placed in exchange for money, goods, services or free products. Google allows them for advertising if they're marked
rel="sponsored"ornofollow; unmarked paid links that pass ranking credit are link spam. - Customer acquisition cost (CAC)Customer acquisition cost (CAC) is the total sales and marketing spend in a period divided by the number of new customers won in that period. It tells you what it costs, on average, to get one paying customer.
- Newsletter sponsorshipA newsletter sponsorship is paying a newsletter to feature your product to its subscribers, usually as a short ad or dedicated mention in one or more issues, so you reach an audience that already trusts the writer.