Online affiliate marketing is one aspect, rather a practice covered in integrated marketing solutions. Integrated marketing tends to target the audience that are scattered and who also use different media to serve their needs. There are four major media enterprises that cater to the population world wide. They are television, radio, print and the Internet. By advertising and promoting the business on more than one media platform, the institutions get an advantage to reach different cross sections and targeted customer segments.

Internet further provides a number of channels which can be used to reach to the audience. Some popular ones are e-mails, web sites, portals, blogs, search engines, social media or community web sites. In affiliate marketing web sites and portals are the principal carriers or channels.

Online affiliate marketing literally means marketing done by an affiliate. An affiliate is a web site owner or publishes who bears a business liaison with the product or service provider. Business groups or individuals that provide goods and services are called merchants or advertisers.

The term Affiliate Marketing that is popularly used to describe the marketing on the web sites, has received unbroken criticism in the Internet world. Marketers who have been successfully operating their affiliate business, even they have reservations on its use. There is one alternative term, proposed and discussed and that is "performance marketing."

Affiliate marketing can be analogous to performance marketing, but not in all cases. Web site owners who are paid according o the sales or actions are directly linked with the performance. They help in selling the products and only after that they receive their share. Moreover, some marketers may be doing it differently. Affiliates who are responsible for advertisement displays and creating ad impressions cannot be directly linked with performance. They function as other offline media marketers and the impacts cannot be measured precisely. In this case performance marketing won’t suit.

Terms like Pay Out or Commissions are used to define the revenue share that affiliate obtains from the merchant. It is based either on profit percentage basis or on flat rates. In case of flat rates the online affiliate marketing are paid a fixed amount for a lead or click. In profit percentage, the web site owner receives a percentage of the profit on a sale or order.