Affiliate software aids in the tracking of affiliate partners. An affiliate tracking software performs a host of functions and helps the affiliate merchants keep track of their affiliates in the most efficient way. Basis functions of affiliate tracking software include keeping track of clicks received, helping the affiliate merchant figure out visitor from which affiliate site has generated the click, who is to be compensated, how much to pay out and what time to pay out. Let us find out how affiliate software works. How does an affiliate tracking software work?

• After the affiliate joins the program he receives a specific affiliate ID by which he is recognized by the affiliate tracking software
• The banners, links etc that the affiliate places on his site is also identified with this special affiliate ID
• Whenever a visitor clicks the banner or link and reaches the affiliate merchant site from the affiliate site a cookie is placed on his computer by the affiliate software. The duration of this cookie may vary
• After the visitor makes a purchase from the affiliate merchants site the affiliate software records the sale in its database after associating it with the specific affiliate ID. The affiliate gets returns each time the visitor makes a purchase until the cookie gets expired
• An affiliate is them notified of the sale by email

Who needs an affiliate tracking software?
All affiliate merchants need to use an affiliate tracking software. Affiliate merchants who run a 100% in-house affiliate marketing program need to buy and install this tracking software in their servers. In case the affiliate merchant uses affiliate network service, the need for buying affiliate software gets eliminated as in this case the affiliate tracking software is provided by the affiliate network service provider. In addition there are many ASP (application service providers) who offer affiliate software services at their own provinces. Using the services of an ASP or affiliate network can help the affiliate merchant get better and upgraded software where-as managing an in-house software does not give the affiliate merchant that freedom as he has to upgrade the software under his own expenses.

There are many websites that give information about online affiliate tracking softwares. Most of them are also listed in Yahoo! and Google directories.

Affiliate marketing programs
An affiliate marketing program is a referral based marketing scheme which involves the payment of commission to sales persons known as affiliates by the online businesses known as affiliate merchants for any sales lead generated by the affiliate. So in a way affiliate marketing is a revenue sharing program between the affiliates and the affiliate merchants.

What is the purpose of affiliate marketing programs?
Affiliate marketing program is one of the most effective ways of promoting goods and services. The basic aim of an affiliate program is to increase visitor traffic to a website and generate sales leads. The affiliate merchant or the business running the affiliate program then pays out certain commission rates based on the sales leads generated on their site by the visitors referred by the affiliates.

All affiliate programs involve providing the affiliates with banners, links or pictures of the product/service that the affiliate can display on his website. As the visitor to the affiliate's site clicks on the link he gets tracked by an affiliate tracking software and is paid a fixed commission rate. Mostly affiliate programs are risk free means of generating customer traffic and promoting goods and services as it involves paying out commission only if specific objectives are achieved. These objectives could be in terms of increasing site traffic, generating sales leads etc. In addition to this affiliate programs give the affiliate merchants access to free advertising space that in-turn helps in brand awareness if not actual sales.

Thus affiliate programs can be considered as a win-win situation for both the affiliates and the affiliate merchants.