Wednesday, April 9, 2008

Affiliate marketing

Affiliate marketing is a web-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's marketing efforts.

Affiliate marketing is also the name of the industry where a number of different types of companies and individuals are performing this form of internet marketing, including affiliate networks, affiliate management companies and in-house affiliate managers, specialized 3rd party vendors, and various types of affiliates/publishers who promote the products and services of their partners.

Affiliate marketing overlaps with other internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization, paid search engine marketing, email marketing and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques like publishing reviews of products or services offered by a partner.

Affiliate marketing — using one site to drive traffic to another — is a form of online Marketing, which is frequently overlooked by advertisers. While search engines, e-mail and RSS capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers' marketing strategies.

The beginning

The concept of revenue sharing, paying commission for referred business, predates that of affiliate marketing and the Internet. The translation of the revenue share principles to mainstream ecommerce happened almost four years after the World Wide Web was born in November 1994, when CDNow launched its BuyWeb program. With its BuyWeb program, CDNow was the first non-adult site to introduce the concept of an affiliate or associate program with its idea of click-through purchasing. had the idea that music-oriented web sites could review or list albums on their pages that their visitors might be interested in purchasing and offer a link that would take the visitor directly to CDNow to purchase them. The idea for this remote purchasing originally arose because of conversations with music publisher Geffen Records in the fall of 1994. The management at Geffen wanted to sell its artists’ CDs directly from its site but did not want to do it itself. Geffen Records asked CDNow if it could design a program where CDNow would do the fulfillment. Geffen Records realized that CDNow could link directly from the artist on its Web site to Geffen’s web site, bypassing the CDNow home page and going directly to an artist’s music page.

Affiliate marketing was used on the internet by the adult industry before CDNow launched their BuyWeb program. The consensus of marketers and adult industry insiders is that Cybererotica was either the first or among the early innovators in affiliate marketing with a cost-per-click program. launched its associate program in July 1996. Amazon associates would place banner or text links on their site for individual books or link directly to the Amazon’s home page.

When visitors clicked from the associate’s site through to and purchased a book, the associate received a commission. was not the first merchant to offer an affiliate program, but its program was the first to become widely known and served as a model for subsequent programs.

In February 2000, announced that it had been granted a patent (6,029,141) on all the essential components of an affiliate program. The patent application was submitted in June 1997, which was before most affiliate programs but not before PC Flowers & (October 1994), (October 1995), (January 1996), EPage(April 1996), and a handful of others.