Choosing the Right Mix of On-line Affiliates: How Do You Select the Best?

Abstract In affiliate advertising, an on-line retailer places a link for its business at a host business's site. The host earns a commission whenever a visitor clicks the link and consummates a transaction with the sponsor. We offer a framework that on-line retailers can use to find appropriate affiliates. Our approach is based on two assumptions. First, we assume that hosts that carry products related to those of the sponsor will be good affiliates. Second, we assume that the relationships between products are reflected in how consumers search for information. Our model uncovers relationships between products on the basis of these two assumptions and thereby identifies potential affiliates.

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