Strategic Insights into Consumer’s Perception Towards Affiliate Marketing

Abstract

Affiliate marketing, one of the earliest and most cost-effective forms of Internet marketing, operates on a performance-based model involving three key stakeholders: advertisers, publishers (affiliates), and consumers. In this system, affiliates promote products or services and earn commissions for customer actions driven through their promotional efforts. The Indian affiliate marketing sector is projected to surpass $835 million by 2025, driven by the increasing popularity of online commerce and widespread Internet penetration. This study explores the fundamentals of affiliate marketing, its structural components, and consumer perceptions in the Indian digital ecosystem. It examines various compensation models like Cost Per Click (CPC), Cost Per Lead (CPL), Cost Per Order (CPO), and Cost Per Mille (CPM), and delves into the roles of different participants including ad servers and agencies. A key focus is on understanding the significance of consumer trust, safety, service quality, and privacy in shaping perceptions of affiliate marketing. The study adopts a descriptive research design, utilizing a sample of 105 respondents selected through simple random sampling. Data analysis through factor analysis using SPSS revealed four dominant perception factors: trust, safety, service quality, and privacy. The results suggest that these factors significantly influence consumers’ acceptance and engagement with affiliate marketing campaigns. Literature review supports these findings and highlights affiliate marketing’s role in brand exposure, customer acquisition, and loyalty building. Further, the study draws attention to affiliate fraud risks and the need for robust management structures. The findings underscore affiliate marketing's potential as a sustainable digital strategy for businesses seeking to optimize customer reach and return on investment. This research contributes to the understanding of consumer behavior in e-commerce and provides insights for marketers to refine affiliate strategies for improved effectiveness and transparency.