Affiliate Marketing

Affiliate Programs

In 1996 Amazon used an affiliate program for the first time.  Affiliate Marketers built websites and included Amazon links.  When a site visitor clicked on an Amazon link and placed an order, the affiliate would receive a commission.  And it still works pretty much the same way today.

The most successful affiliate programs are in adult gambling and retail industries.   Look for lots of growth in the following sectors: mobile phones, finance, and travel sectors.

Affiliate programs use a method called cost per click for measurement. Display advertising and paid search are two popular affiliate programs. In the method called cost per mille, an affiliate only needs to display an advertisement to his web site in order to get the commission.

In ‘pay per click’, the user doesn’t only have to look at the advertisement but also  must  click on it. The number of clicks is counted and then the payment is made.

The biggest advantage for the merchant is that company does not have to pay any money unless some revenue is collected. This is called a ‘pay for performance‘ model. This can help businesses that do not have initial capital for advertisement expenses.

Reportedly in 2005, affiliate marketing generated sales of more than $1 billion and this number more than doubled in 2006 at well over $2 billion.   I expect these numbers to keep growing.  Affiliate marketing has a very bright future.