Affiliate Marketing
Affiliate Marketing
What is affiliate marketing?
- Partners sell, and you pay commission based on results
- Low risk: it is performance-based, with no ad spend up front
- Expand reach by borrowing a partner’s trust and audience
Adopting affiliate marketing changes what the marketing team actually does. The work shifts from creating ad assets and committing media budgets up front to operations: finding partners and running contracts, tracking, and payouts. Money also goes out after results are confirmed, not before a campaign starts, so the documentation that supports a payout matters more than the budget approval memo. Companies that stumble early usually don’t fail because they can’t find partners. They fail because they never put the criteria for whose results count in writing, and end up in disputes with their partners.
B2B can’t simply reuse the consumer model. An online store closes the sale within a 30-day cookie window after a click, but in B2B it takes 3–6 months from first contact to contract, and the person who clicks the link is not the executive who signs off. That is why many companies use a deal registration model: the partner registers the client company and contact first, and the referral is credited to them for 90–180 days. Rewards fall into three types: a fixed fee per lead, 10–20% of first-year contract value, or recurring payments for as long as the subscription continues. You also need to settle the boundary with resellers before signing. A reseller resells under its own name and is the contracting party, while an affiliate only makes introductions, and the contract is signed directly between you and the customer.
The most common misconception in practice is, "We only pay for results, so it’s basically free." Tracking tools, partner vetting, monthly payouts and withholding tax handling, and partner materials all take people’s time. A bigger problem is partners who buy your brand name as a search ad keyword and intercept customers who would have come to you anyway. Unless the contract explicitly bans bidding on brand keywords and promising discounts on your behalf, commissions simply leak away. And if a partner’s post omits the required disclosure of compensation, your company, as the advertiser, becomes the target of sanctions for violating Korea’s endorsement and testimonial guidelines. If partners keep making promises like "This cuts your labor costs in half," contracts go up, but the cancellation rate catches up with you six months later.
John KimInstructor John Kim, author of B2B Marketing Design and CEO of Nanum Consulting
Junyoung NohConsumer and generational trend analyst & AI content marketing specialistAmazon’s Associates program in the 1990s is often cited as an early model, and with advances in digital tracking technology it became established as performance-based marketing.
Consider a hypothetical case: Company A, an HR management SaaS firm with 42 employees and annual revenue of about KRW 6 billion (≈ US$4,489,000). Search ad costs jumped 1.7x in a year, pushing the cost per lead above KRW 90,000 (≈ US$67), yet new contracts stayed stuck at 6 a month. With a three-person marketing team and no capacity to run more ads, they decided to pilot a six-month affiliate program.
- Kim, who leads marketing, shortlisted 80 labor and tax advisory firms and HR bloggers, sent proposals to 28, and signed 11 on these terms: "Just introduce us to your clients, and we’ll update you on the contract status every week."
- Instead of cookie tracking, we built a deal registration form: when a partner submits the client company name and contact details, we credit them with the referral for 120 days. Article 3 of the contract states that for duplicate registrations, whoever submitted first gets the credit.
- We set the commission at 15% of first-year subscription fees, with a clause for a full clawback if a customer cancels within 3 months. But one labor attorney said, "A full clawback is too much," so we revised it to clawing back only 50% on cancellation.
- Park, a sales manager, built a 10-page partner introduction deck and a 6-minute demo video. To keep partners from promising discounts on their own, the first slide of the training material says, "We handle pricing conversations."
- In month 3, we found that one blogger was running search ads on Company A’s brand name. We withheld commission on those 3 deals, terminated the contract, and re-sent the prohibited keyword list to all 11 partners.
- Six months later, the affiliate channel was producing 31 leads a month, and 9 of them turned into contracts. Cost per lead dropped from the KRW 90,000 (≈ US$67) range to KRW 38,000 (≈ US$28). Partner referrals accounted for 34% of all new contracts.