Have you ever wondered how affiliate marketing came to be?
This popular online marketing strategy has revolutionized the way businesses operate and made it possible for anyone with a website to earn commissions by promoting products or services.
So, when did affiliate marketing start?
Let’s take a walk down memory lane and find out.
The Origins Of Affiliate Marketing
Affiliate marketing can trace its origins back to the dawn of the internet.
In the 90s, William J. Tobin decided to start a company that would allow website owners to place banner advertisements on their sites in exchange for a cut of the revenue generated from clicks on those ads.
This company, which they named PC Flowers & Gifts, is widely considered to be the first affiliate network.
Over the next few years, other companies followed suit and began launching their own affiliate networks. Among them was CDNow, which was founded in 1996 by two music enthusiasts who saw an opportunity to capitalize on the then-nascent internet’s ability to reach a global audience of potential customers.
CDNow provided its affiliates with commissions for every CD sold that was traced back to their site—a practice that would become known as “cost-per-sale” or “CPS.”
The Birth Of Cost-Per-Click Affiliate Marketing
In 1998, another major player entered the affiliate marketing scene: Commission Junction.
Commission Junction (or “CJ”) took a different approach from its predecessors by paying its affiliates not for sales or leads generated, but for each click on the advertiser’s banner ads placed on their site. This “cost-per-click” or “CPC” model would go on to become the standard in affiliate marketing.
The Modern Era Of Affiliate Marketing
In recent years, affiliate marketing has continued to evolve and grow in popularity. Thanks to new technologies and platforms such as social media and mobile devices, affiliate marketers now have more ways than ever before to reach potential customers and promote products or services.
Not all affiliate programs are created equal. There are four main types of affiliate marketing today: pay-per-sale, pay-per-lead, pay-per-click, and revenue sharing.
- Pay Per Sale: This is the most common type of affiliate program. Under this program, the affiliate is rewarded with a commission every time they refer a customer who makes a purchase.
- Pay Per Lead: Similar to Pay Per Sale, but in this case, the affiliate is rewarded when they refer a customer who takes some sort of action on the merchant’s site Whether it’s signing up for a newsletter or taking a survey.
- Pay Per Click: As you might’ve guessed from the name, under this program affiliates are paid based on how many clicks they generate regardless of whether or not those clicks convert into sales.
- Revenue Sharing: Under this program, affiliates are given a percentage of the revenue that they generate for the merchant. This can take many forms such as subscriptions, ad placements, or even sponsoring other affiliates.
How Amazon Evolved Affiliate Marketing
Amazon’s affiliate program, which they launched in 1996, was one of the first of its kind. The program allowed website owners to earn a commission on sales they generated by linking to Amazon products on their site.
This was a win-win for both Amazon and the website owners; Amazon got more exposure for their products and the website owners made money by driving traffic to Amazon’s site.
The program was so successful that other companies quickly followed suit and began launching their own affiliate programs.
But Amazon didn’t stop there.
They continued to innovate and evolve their affiliate program to make it even more effective. In 2003, they introduced what would become one of their most successful initiatives: the Amazon Associates Program.
The Associate’s Program allowed website owners to not only earn a commission on sales they generated but also on clicks they drove to Amazon’s site (even if those clicks didn’t result in a purchase).
This was a game-changer for affiliate marketing because it allowed website owners to be compensated for simply driving traffic to a merchant’s site, regardless of whether or not that traffic resulted in a sale.
Amazon continued to refine and improve their affiliate program over the years, adding new features and benefits for both merchants and affiliates along the way. Today, their program is widely considered to be the gold standard in the industry.
And while other companies have tried to replicate Amazon’s success, few have come close to matching their level of dominance in the space.
There’s no doubt about it: Amazon is the king of e-commerce. And a big reason for their success is their innovative approach to affiliate marketing.
By introducing new features and benefits over the years, they’ve continued to evolve the affiliate marketing landscape and set the standard for other companies to follow. If you’re looking to get started in affiliate marketing, there’s no better place to start than with Amazon.
The Future Of Affiliate Marketing
Affiliate marketing has become an increasingly profitable and popular way for businesses to reach new customers and promote their products and services. But what does the future hold for affiliate marketing?
Here are a few predictions.
1. More Integration With social media
As social media continues to grow and evolve, so too will affiliate marketing. We expect to see more businesses utilizing social media platforms like Instagram, Facebook, and Snapchat to run their affiliate programs and drive traffic to their websites.
This trend is already starting to take off, as we’re seeing more and more influencers promoting products and services on their social media channels via link in bio tools like Linktree.
2. Greater Transparency
Affiliate marketing is already a pretty transparent industry, but we expect that level of transparency to increase even more in the future.
With the rise of influencer marketing, customers are becoming savvier about when someone is promoting a product because they genuinely love it, or because they’re being paid to do so.
As a result, we expect businesses to be upfront about their affiliate relationships in order to maintain customer trust.
3. More Focus On Mobile
As more and more people use their smartphones and tablets to shop online, businesses will need to make sure that their affiliate programs are optimized for mobile.
This means designing creative ads and landing pages that look great on smaller screens, as well as making it easy for customers to click through to the merchant website or make a purchase on the mobile device.
Affiliate Marketing: Past & Present
Affiliate marketing is one of the most popular online marketing strategies used by businesses today—and it shows no signs of slowing down anytime soon.
But where did this strategy come from? How did it evolve into the powerhouse it is today? To find out, we took a walk down memory lane and explored the history of affiliate marketing. From its humble beginnings in 1990s all the way up to today, it’s been quite a ride!
The good news is it’s never too late to start and the best time to start is now.
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