What’s Affiliate Marketing? Should I Care?

Many of the ads you see online are created by marketers who are paid each time you click on their ad. And if that click takes you to a website where you sign up to try a product or you make a purchase, the marketer may get paid even more. These are affiliate marketers. They are hired by the owner of the product to promote it on social media, on websites, and through email. Sometimes networks of affiliate marketers negotiate the rate marketers will get paid per click, per sign-up to try the product, and per purchase. Everyone from the merchant to the affiliate marketers gets a cut. And all these people may be tracking you, too, just from that one first click.

Affiliate marketing is a good way to promote a product or service as long as the ad is truthful. The problem is that some dishonest affiliate marketers put out ads with exaggerated claims or misleading information to get people to click. They may say anything to get you to click on their ad because they have an incentive – getting paid. Check out the infographic we created to explain this.

Sometimes deceptive ads could be bait for a scam. Take, for example, a low-cost trial scam that the FTC stopped recently. People who clicked on ads placed by affiliate marketers for a “free” trial ended up on a website that offered the product trial for $1.03. That amount is not much, but it’s not free. In fact, people who bought the trial for $1.03 ended up being charged almost $200 monthly for a second product they didn’t even want. We explained what happened in this infographic.

So, the next time you see an online ad, pause before clicking. Ask yourself:

  • How do I know who’s truly behind the ad?
  • Do I know if they’re being truthful? Is someone being paid to get me to click?
  • Who is tracking me when I click on the ad? And who is getting that information about me?

And if the ad says one price, but when you click on it you land on a website that says something else, you may have landed on a scam. No matter what, check your bills to be sure you’re not being scammed.

This article by the FTC was distributed by the Personal Finance Syndication Network.