Jump to navigation Jump to search For marketing to a specific interest group, see Affinity marketing. This article needs affiliate referral marketing programs citations for verification. Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts. The market has grown in complexity, resulting in the emergence of a secondary tier of players, including affiliate management agencies, super-affiliates, and specialized third party vendors.
Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Affiliate marketing is commonly confused with referral marketing, as both forms of marketing use third parties to drive sales to the retailer. The two forms of marketing are differentiated, however, in how they drive sales, where affiliate marketing relies purely on financial motivations, while referral marketing relies more on trust and personal relationships. Affiliate marketing is frequently overlooked by advertisers.
The concept of revenue sharing—paying commission for referred business—predates affiliate marketing and the Internet. The concept of affiliate marketing on the Internet was conceived of, put into practice and patented by William J. Gifts remained on the service until 1996. 6 million per year on the Prodigy service. Gifts on the Internet in cooperation with IBM, who owned half of Prodigy.
Gifts had launched a commercial version of the website and had 2,600 affiliate marketing partners on the World Wide Web. Cybererotica was among the early innovators in affiliate marketing with a cost per click program. CDNow had the idea that music-oriented websites could review or list albums on their pages that their visitors might be interested in purchasing. These websites could also offer a link that would take visitors directly to CDNow to purchase the albums. July 1996: Amazon associates could place banner or text links on their site for individual books, or link directly to the Amazon home page.
When visitors clicked on the associate’s website to go to Amazon and purchase a book, the associate received a commission. Amazon was not the first merchant to offer an affiliate program, but its program was the first to become widely known and serve as a model for subsequent programs. In February 2000, Amazon announced that it had been granted a patent on components of an affiliate program. Affiliate marketing has grown quickly since its inception. The e-commerce website, viewed as a marketing toy in the early days of the Internet, became an integrated part of the overall business plan and in some cases grew to a bigger business than the existing offline business. In 2006, the most active sectors for affiliate marketing were the adult gambling, retail industries and file-sharing services. The three sectors expected to experience the greatest growth are the mobile phone, finance, and travel sectors.
Websites and services based on Web 2. 0 concepts—blogging and interactive online communities, for example—have impacted the affiliate marketing world as well. These platforms allow improved communication between merchants and affiliates. Forms of new media have also diversified how companies, brands, and ad networks serve ads to visitors. Within more mature markets, less than one percent of traditional affiliate marketing programs today use cost per click and cost per mille.
Cost per mille requires only that the publisher make the advertising available on his or her website and display it to the page visitors in order to receive a commission. Cost per click was more common in the early days of affiliate marketing but has diminished in use over time due to click fraud issues very similar to the click fraud issues modern search engines are facing today. While these models have diminished in mature e-commerce and online advertising markets they are still prevalent in some more nascent industries. China is one example where Affiliate Marketing does not overtly resemble the same model in the West. With many affiliates being paid a flat «Cost Per Day» with some networks offering Cost Per Click or CPM. The advertiser must convert that visitor first.