Here, we’ll cover a basic definition of affiliate marketing, along with offering a brief historical timeline.
Affiliate Marketing Definition
Affiliate marketing is a specific marketing practice where a business rewards affiliates for each visitor (i.e., customer) brought about or converted by the affiliate’s marketing efforts. One example of affiliate marketing include rewards sites, where visitors are rewarded with cash or gifts after completion of an offer, and / or the referral of others to the site.
In the affiliate marketing industry, you’ve got four core players: the merchant (also known as ‘retailer’, ‘brand’ or ‘advertiser’), the network, the publisher (also referred to as ‘the affiliate’) and the customer.
Some markets are more amenable to affiliates than others. Many online stores cater only to the retail market place acting as affiliates for the brands they carry. But what about online stores that are for wholesale only. Take for example this online wholesale janitor supplies store called CleanItSupply. They are actively looking for innovative business partners and have created an equally innovative approach to handle unsolicited sales calls and sales email. In their pitch for new venders, the CleanItSupply.com team states that great janitorial products have helped shaped a large part of who they are today. Therefore, if a manufacturer/vendor would like to capture their attention and pitch CleanItSupply a new product line in the efforts to becoming part of the CleanItSupply.com team, the hopeful vendor can literally buy for $38.46 a 1/2 hour to pitch their line!
The market has matured in complexity to necessitate a secondary tier of players, which includes affiliate management agencies, super-affiliates and specialized 3rd parties vendors.
There’s some overlap with affiliate marketing and more traditional advertising methods, such as organic SEO, e-mail marketing, paid search engine marketing and display advertising. With affiliate marketing, though, there’s room to use less orthodox techniques, such as publishing product reviews or services offered by a partner. Affiliate marketing is a form of online marketing – a world that’s often overlooked by advertisers. Sure, you can rely on search engines and e-mail to get the word out, but affiliates is slowly growing from its low-profile origins, to play a more and more significant role in retailers’ marketing strategies.
Affiliate Marketing Origins
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The revenue sharing—paying commission for referred business concept actually predates affiliate marketing, even the Internet itself. Just after the origination of the World Wide Web in November 1994, this concept of revenue share principles was translated to the world of e-commerce.
One of the first e-commerce sites to utilize affiliate marketing with a cost per click program was the adult industry site, Cybererotica. One of the first non-adult websites to use an affiliate or associate program complete with click-through purchasing was CDNow when it launched its BuyWeb program. 1n 1996, Amazon.com launched its highly successful associate program, where associates can easily place banners or text links that link back to Amazon on their sites. If a visitor clicks on a link, and makes an Amazon purchase, the associate receives a commission.