Affiliate marketing started when Amazon started to give commissions for the people marketing their goods. This idea is prevalent in internet society about affiliate marketing. In this article I will answer the question what is affiliate marketing with historical background.
What Is Affiliate Marketing?
Affiliate marketing started before the invention of the internet. Affiliate marketing started thousands of years before the creation of the internet. Think about it. You might have gotten a promise from a physical shop seller to give you a discount if a friend of yours purchased from him. This offer is a form of affiliate marketing.
Affiliate marketing is a form of word of mouth marketing strategy. The only difference is that the retailer pays affiliate marketers, but word of mouth is not. The marketer in affiliate marketing recommends a product or a service to the prospects interested in related passion. Marketers call this passion “niche”.
If any of the candidates purchased the marketed product, they converted to be a customer. When this happens, the marketer gets a commission; and this is known as affiliate marketing. This identification is valid both on the internet and in real life.
Internet Early Ages
To understand what is affiliate marketing, we need to go back to the beginning. In the internet’s early ages, web programmers were linking the websites using reciprocal reference likes to increase the traffic among each other. However, when the entrepreneurs and business-oriented individuals have drawn their attention to the benefits of the existence on the internet, they constructed profit-oriented websites. Their main aim is to find visitors where possible they are. Selling links among websites directly resulted from the introduction of these profit-oriented websites.
Early Search Engines
At the same time, search engines and directories became popular because the websites numbers started to be huge. The searchers began to need search engines to help them find what they were searching for. The search engines were and still are very helpful. Instead of selling the links, search engines recommended some websites over others. Some due to valuable content while others due to paid ads.
Paid Ads And Cost
newspapers and magazines was the first to use paid ads. The first pricing method is called Cost Per Mille (Latin word mean thousand) (CPM). Later on, the advertisers started to use other pricing models like Cost Per Click (CPC) and Cost Per Inquiry (CPI).
The Success Of Amazon
Soon, Amazon.com became the most successful online bookseller. They applied CPI on their website by allowing other websites to list the books they chose to market them on their sites. This system used by many websites is known later on by Affiliate Marketing or Associate Programs.
Some people realized that Affiliate Marketing that Amazon had used could be a separate business by itself; therefore, affiliate directories was established.
The affiliate commerce system shaped along the time since the World Wide Web started the interface to the internet using HTML to link documents together.
At that time, the idea of cost per click did not have any means to ensure that the click is by real prospects of fake ones. In 1989 Willian decided to give commission to the affiliates only when they make sales. Willian is an American entrepreneur who founded many businesses and commission per sale, first implemented in one of his companies, PC Flowers and Gifts.
The First Affiliate Program
The results were immense. He started recording the idea as a patient, and he recorded this system under his name in 2000. the success of the first affiliate program encouraged another company called CDNew.com to start its affiliate program in 1994. the program called “Buy Web” woned by Geffen Records. Geffen Records created the program to sell music CDs.
In the absence of advanced payment sites, like Paypal, venom, and stripe, the merchanises payed the commissions by check of discount on CD purchases. The first affiliate marketing program worldwide was established by Amazon in 1996. It became a role model for all affiliate marketing systems. It is worthwhile to mention that Amazon has granted a patent on components of an affiliate program in Feb. 2000.
What Is Affiliate Marketing Globe Wide
The global nature of Amazon’s affiliate system was the second start for affiliate marketing. Their business model attracted many to establish affiliate networks as a separate independent business.
As a result, in 1998, two affiliate networks were found, namely ClickBank and Commission Junction. These two networks have used Amazon’s affiliate system except the commission percentage of each sale which the retailer specifies.
Future Of Affiliate Marketing
In 2017, 5 billion clicks on affiliate links resulted in 170 million sales. Also, statistics showed that the revenue of affiliate marketing is increased by 10% at the rate of 10% every year. Moreover, experts expect this growth to continue for years to come.