Affilliate Marketing vs Google Adsense

Affiliate Marketing is usually based on a CPA (cost per action) model.

• A company (a.k.a. advertiser or merchant) runs an affiliate program either by itself or through an Affiliate network such as Linkshare or Commission Junction.
  
• The publisher promotes the advertiser's services or products through a website, email campaign, ppc campaign or a combination thereof.
• A visitor coming through a publisher is tracked. If the visit converts to a sale, the publisher earns a commission paid by the advertiser. The network tracks, authenticates and confirms payments for every successful transaction.
  
• Publisher has control on what product/service they want to promote.
• Publisher does not earn any revenue for clicks.

Adsense is a CPC (cost per click) program from Google.

• The publishers in this case signs for the program and places the Adsense advertisement panel at various strategic locations on their site.
• The adverts are auto generated by Google.
  
• The publisher can tweak but does not have control to what gets displayed.
  
• The publisher is paid for each authentic click on the advert from their site.

Google added a CPA model into Adsense in 2006 to compete directly with the affiliate networks.

Amongst the major Affilliate Networks, Linkshare offers a CPC program for specific merchants (e.g. Kayak) Commission Junction had a CPC program. They closed this and have stuck to the CPA model.