Define affiliate marketing.

Affiliate marketing is defined as a strategy where businesses pay affiliates for products sold through their efforts. This approach relies on the performance of affiliates, who promote the business's products or services, typically through their websites or social media channels. The affiliates earn a commission or a fee for each sale or lead generated from their marketing efforts, creating a mutually beneficial relationship between the business and the affiliate. This model incentivizes affiliates to promote products effectively, as their income depends on their ability to drive sales.

The other concepts presented do not accurately capture the essence of affiliate marketing. Increasing product costs for retailers, integrating social media into online stores, or developing customer loyalty programs are related to marketing strategies but do not include the performance-based compensation model that defines affiliate marketing. Understanding the core principle of affiliate marketing as a performance-driven partnership is crucial for leveraging this tactic effectively in business.