The Evolution of Affiliate Marketing
Affiliate marketing is a massive worldwide business that’s been an integral part of the Internet’s amazing growth story. And, like the web itself, affiliate marketing has evolved considerably since the days of dial up.
That evolution was the subject of recent timeline on www.nanigans.com titled, The Evolution of Performance Marketing. Nannigan’s take on affiliate marketing history is modeled on the evolution of human beings and is an amusing, but short, take on the subject. Here’s a few of the high points that are worth remembering.
The Primitives (CPM-Era)
Remember the days when simply getting an eyeball on a page was all it took to get a payout? Back then, link farms ruled the Web, Google was still just a huge number, and cashing in was easy.
William Tobin, the owner of a proto-Amazon.com business called, PC Flowers & Gifts, is credited with launching affiliate marketing back in 1989. Tobin’s business operated on the Prodigy Network and migrated to the World Wide Web in 1994.
By that time, PC F&G was pulling in around $6 million a year and affiliate marketing was an Internet mainstay.
Like so many other web innovations, affiliate marketing got a big boost from the adult entertainment industry. Internet porn was just taking off in the early 1990′s and a host of x-rated affiliate programs sent it into the stratosphere. (And gave birth to link farms and lots of other SEO shenanigans along the way.)
Who Was Really First?
There’s a fair amount of confusion about who launched the first online affiliate marketing program, so it’s worth taking a step back to clarify who gets firsties here.
Amazon.com is frequently, and incorrectly, given credit for establishing affiliate marketing and that’s just not true. What Amazon did do, and should definitely be commended for, is bringing affiliate marketing to the masses.
The company launched their program in 2000 and patented the components of it 1997. PC F&G has affiliate marketing patents that date back to 1996, giving them the clear edge in this race.
Hunters & Gatherers (CPC-Era)
Thought the early days were lots of fun for affiliate partners, affiliate operators needed something a bit more than random and that’s when web-advertising networks like Overture began targeting ads towards qualified customers.
The CPC-era also gave rise Google’s AdSense program. Though AdSense clearly revolutionized web advertising and marketing for most affiliates, its anti-gambling restrictions make it pretty much off-limits to casino affiliates.
Civilization Arrives (The Conversion Era)
Everyone had to know that the days of getting paid for eyeballs were numbered and that’s when the Conversion/CPA-era began. This era is a natural part of the evolutionary process, no matter how big a pain in the butt it is for affiliates.
So what’s the next step in the evolution of affiliate marketing? At nanigan.com they seem to think that predictive algorithms will be used to place a premium payout on high value conversions. That prediction doesn’t seem too outlandish given the incredible power of algorithmic technology to predict so many other things.
(There’s also the question of whether or not the term, performance marketing will replace affiliate marketing, but we’ll save that discussion for another time.)