Saturday, June 28, 2008

Some history on Affiliate Marketing

So, you’ve been reading and reading and reading. And you are still not sure what affiliate marketing is all about. Well, you are definitely not alone based upon the number of visitors that I have to this blog.

Affiliate marketing is definitely one of the most popular and effective ways to:
1) advertise on the internet and
2) make money on the internet

Believe it or not, the idea of affiliate marketing goes back to about 1994. The music web site was, as far as most people know, the very first site to use affiliate marketing. They were the first site to pay other sites to direct traffic to them. One of the biggest sites now associated with affiliate marketing is (And they do very well with it considering they only pay a commission of 4%.) Nowadays, affiliate marketing is a part of just about every major web site.

Affiliate marketing works very well for the advertiser because it is based solely upon performance. The advertiser monitors the IP addresses of the incoming traffic. The site with the ad (hosting site) will earn money based upon the traffic that it sends to the advertiser. For a hosting site, this is the most popular form of affiliate marketing and the simplest way to earn some money.

The method described above is just one type of affiliate marketing. Some advertisers will pay the hosting site based upon the number of times the ad is displayed. This is not very popular with adverisers since it is really hard to make sure the number is not forged or to even confirm that the site visitor actually saw the ad.

And another type of affiliate marketing requires not only a click on the link but also some kind of action to take place. Usually the advertiser wants, at minimum, an email address signup and, at best, an actual sale. Only when this action occurs does the site hosting the ad earn any money. This is not a popular advertising method with hosting sites because it requires their site visitor to not only click through on an ad, but also to sign up for something. On the other hand, it is also the best method for the hosting site to earn the most money.

It took only a few years for affiliate marketing to really take off. For the advertiser it is very cost effective since it is based upon actual performance. With both the advertiser and the hosting site profiting from affiliate marketing, it can be expected that affiliate marketing will still be a major advertising technique moving into the future.

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