As mentioned before there are three to four parties involved in affiliate marketing: the advertiser, the publisher, the customer and often an affiliate network. The advertiser provides a product or a service. He looks for publishers to further distribute his product. The publisher is the party that will advertise for the advertiser. An affiliate network is the intermediary between the advertiser and the publisher. These 3 parties with the customer form the basis for affiliate marketing.
Affiliate marketing explained in more detail
So the concept of Affiliate marketing is simple, the publisher promotes the advertisers’ website, and the advertiser rewards them. The reward is most commonly commission on the sales they generate, or the click-throughs they send. The most popular model by far is to give publishers some form of commission on the actual sales they generate on the advertisers’ site. This is known as performance based marketing.
The ways in which a publisher promotes the advertisers’ site can vary dramatically. From simply adding a text link or banner on their site pointing to the advertisers’, all the way to having specific pages on their site detailing the products or services of the advertiser and linking directly to them on the advertisers’ site. Although becoming less and less common, it's also possible for publishers to promote the website of the advertiser offline with posters, flyers etc. and still track their commission.