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What are Affiliate and advertising services?

An affiliate or advertising service makes money from each customer that follows a link from one website to another.

Affiliates

Affiliates make money either for each click or each sale.
affiliates are usually controlled by the website receiving the clicks. Thus are open to abuse (click shaving),

Some use a third party to count the clicks and these are less likely to have the above problems.

From a search engine perspective it depends how the links are set up as to whether the search engine can follow them, most search engines have trouble with these links.

Advertising

An Advertising service will charge you for each click or impression*

Think of all the ads you see on web pages.

Most advertising services design their links to prevent search engines from following them. They don't want your site improving in search engines because you won't need them if you do.

Disadvantages

None really, neither of the above are wrong, I use both for my websites and they have their place in your marketing campaign, But advertising is expensive compared to good placement in a search engines results.

* An impression is when your ad is displayed on a web page regardless of whether any one actually sees it or clicks on it.

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