Research Question

How can the situations, under which affiliate marketing is efficient for content providers, be characterized?

According to Duffy, in order to ensure success of their affiliate programs, companies and content providers should create a win-win relationship that would lead to generating enough sales at the merchants' web sites and sufficient earnings for content providers (Duffy, 2005). Libai et al. claim, that setting an interesting commission rate and commission model is crucial for attracting content providers to an affiliate program (Libai et al., 2003).

On the contrary, Amazon succeeded to persuade a great number of content providers to advertise its products in its affiliate program, even though its main competitors (such as Barnes & Nobles) have implemented the programs as well and have been offering even higher commissions than Amazon (Hoffman & Novak, 2000). Amazon's basic commission is 4% from the order amount (Amazon, 2007), whilst Barnes & Nobles provides 5%. (Barnes & Nobles, 2007).

As we have shown in the example of Amazon, the commission rate is not necessarily the most important factor that plays role in content providers' selection of affiliate programs. However, the other factors influencing the selection process are not known and have never been researched. Therefore, the thesis intends to provide an insight about the content providers' selection of affiliate programs and answer the following research question:

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