An affiliate network acts as an intermediary between publishers (affiliates) and (merchant) affiliate programs. It allows publishers to find affiliate programs, which are suitable for their website and it helps websites offering affiliate programs reach its target audience.

For merchants, services can include providing tracking technology, reporting tools, payment processing, and access to a large base of publishers. For affiliates, services can include providing one-click application to new merchants, reporting tools, and payment aggregation.

The networks are free to join for affiliates. The merchant on the other hand has to pay a fee. Traditional affiliate networks might charge an initial setup fees and/or a recurring maintenance fees. This differs from network to network. It is common for affiliate networks to charge merchants a percentage of the commission paid to the affiliates as fee for their services.

Traditional affiliate networks allow the merchant to offer its publishers revenue share or cost per action as compensation method. The majority of merchant programs prefer revenue share over cost per action.

CPA network

In addition to the traditional networks exist also lead generation and CPA networks. Lead generation networks are typically networks that next to performance based promotions (affiliate marketing) also offer CPM or CPC based display advertising. CPA networks on the other hand are often so-called "super affiliates" who are themselves affiliates of merchants via the traditional affiliate networks and recruit other affiliates to promote the merchant through them instead of directly via the merchants program at the traditional network.

CPA networks take advantage of the ability to get higher commission rates due to their high volume, which they pass in part down to their affiliates. Average affiliates get typically paid a lower commission if they promote the merchant directly, because they are rarely able to generate the required volume to reach the higher payout tiers.