1) Affiliate marketing involves businesses rewarding affiliates for marketing efforts that bring visitors or customers. It is a revenue sharing model between a website owner and online merchant. 2) There are three main ways affiliates can earn money: pay per click, pay per lead, or pay per sale programs. 3) Affiliate marketing provides advantages to both merchants and affiliates. It is a low-cost marketing channel for merchants, while affiliates can earn revenue from marketing other companies' products.