Today, affiliate marketing is one of the best ways to boost both traffic and sales for a merchant. Have you ever wondered, though, when or how it started? Let’s take a quick and interesting trip down memory lane!
The concept of profit sharing or paying referrals started long before affiliate marketing and/or the World Wide Web began. As early as the 90’s, a few small trades shared profits.
1989 – William J. Tobin conceived, applied, and patented the first affiliate marketing program for his company, PC Flowers and Gifts. By the end of 1993, his program was turning in more than $6 million a year. The model he built involved paying The Prodigy Network a sum for each product sold.
1994 – CDNOW had BuyWeb. Its concept was to sell music tracks by allowing web sites to review them and write content that can attract readers to buy them. It even took a step higher by letting partners post a direct purchase link to CDNOW. This was the first known affiliate marketing model on the web.
1996 – Amazon unveiled its “associate program.” This program works by letting associates post direct links and banners on their web sites and linking them to Amazon’s page when clicked. They get a cut in the payment whenever a client buys the product. Many people used this model; thus, making this the blueprint for latter programs.
1998 – launch of partner networks Commission Junction and Clickbank. This made the system a lot handier for sellers that are smaller than Amazon. They offered customers payment options and managed the link between merchants/partners.
2000 – the Federal Trade Commission (FTC) published rules for the sector that helped seal its strength in the online marketing world.
2008 – FTC stated Affiliate Nexus Tax and new disclosure rules to control the field more. As years passed, the market has grown complex, seeing the rise of multi-tiered players such as affiliate management agencies.
This was important to share because not only does it offer a road map to the growth of affiliate marketing as a whole but it also points to the constant disruption of digital marketing. Although affiliate marketing will evolve and the players will change, the concept is here to stay.