Define 'Affiliate marketing'.

Affiliate marketing is defined as a performance-based marketing strategy where businesses reward affiliates for driving traffic or sales to their site. This model operates on the principle that affiliates promote a company's products or services, and in return, they earn a commission based on their performance, typically measured in terms of clicks, leads, or sales generated from their marketing efforts.

The effectiveness of affiliate marketing lies in its focus on measurable outcomes, allowing businesses to scale their marketing efforts while managing costs more effectively, as they only pay for actual results achieved. This strategy leverages the reach and influence of affiliates, who can include bloggers, website owners, or social media influencers, to attract potential customers without upfront costs.

In contrast, other options mentioned do not fully encapsulate the concept of affiliate marketing. For instance, while advertising on social media may involve affiliates, it is not specifically tied to the performance-based aspect of affiliate marketing. Similarly, brand collaborations with influencers can involve a flat fee or other arrangements, diverging from the performance incentives typical in affiliate marketing. Lastly, a fixed payment system for hosting services does not relate to the marketing practices that generate sales or traffic through affiliate relationships.