The History of Affiliate Programs – Surprising Innovators and
Innovations
January 03, 2005
By Lori Wilkerson
The history of affiliate programs on the Internet is relatively
recent, probably beginning somewhere in the mid-1990’s, but
since this innovation wasn’t being tracked in a formal way early
on, and it’s anybody’s guess who the first official sponsor was.
Urban legend and plenty of press regarding the history of
affiliate marketing says that Amazon was the first to use a
successful affiliate program, and their own press history
certainly backs up a huge success story. In 1998, they began
inviting retailers and webmasters to link to the Amazon site for
a commission on each sale, and soon had 30,000 affiliates.
Currently, they have over 600,000 links and a patent to their
name for their in-house system.
Amazon is certainly the most successful marketer to use
affiliates to date. They’ve used it to create profits in the
millions and created a coveted niche for themselves, but they
probably weren’t the first to use the concept.
Some smaller companies that successfully used affiliate links to
market their services included AutoWeb, EPage, PC Flowers &
Gifts, and BrainPlay. While none of them functioned on a level
anywhere near that of the Amazon colossus, they did use their
programs successfully before Amazon put affiliates squarely in
the spotlight for Internet marketers.
Did the Internet “Invent” Affiliate Marketing? In a word – No.
The concept has been around for years, and it’s a hugely
successful one because it works. Referrals from one business to
another (such as a real estate broker being affiliated with a
particular mortgage lender) have taken place for years.
What the Internet did was expand the client base from a
particular city or geographic area to the world. And the first
industry on the web to recognize the potential of affiliate
programs was also one of the first industries to proliferate on
the web – adult web sites.
The online porn industry originally used the cost per click
(CPC) model for traffic driven to their site, but soon switched
to the more effective cost per acquisition (CPA) method when it
realized just how flooded their sites were becoming with the
idle curious. Sites like CyberFoxes (1996) were paying
commissions of 50% and making plenty of money with their
affiliate marketing links before more mainstream programs really
took off.
Keeping Track Becomes a Chore
Affiliate Marketing has grown astronomically in the last ten
years, simply because it is so successful. It works for
merchants at both ends of the link and consumers like the ease
of use.
However, as more and more companies implemented the programs a
new wrinkle developed – tracking commissions and understanding
conversion rates became difficult. Most companies did the work
in-house and there was no clear-cut method. In some cases,
affiliates would have a falling out if there was a discrepancy
between their records. Who was right? Hard to tell in many
cases.
In 1996, both LinkShare and Be Free addressed the problem of
managing affiliate programs by offering Internet solutions.
Commission Junction, launched in 1998, became the next big
player in the field. These three recognized a need for reliable
tracking, management and reporting for affiliate partners by an
impartial third party company that could manage the day-to-day
details and they developed programs that handled it beautifully,
enabling the continued expansion of affiliates.
The next logical step was a way for businesses to find and
research affiliate programs. The word was out that affiliate
programs worked – and worked well. But many people just didn’t
know where to go to find good websites to link back to them for
potential CPA or CPC partnerships.
With so many affiliate marketing programs available, it could
become overwhelming when someone tried to get started as an
Internet marketer. In 1997, Refer-it.com became the first
directory of affiliate programs on the Internet that
comprehensively listed available affiliate programs. Allan
Gardyne’s
Associate Programs
was created in 1998 and was immediately followed by other key
sites, illustrating the popularity of, and need for, this type
of information.
Today, affiliates programs are steadily on the rise. Not all of
them will make it. The ones that do will succeed largely because
the individuals working on them put in the time and effort to
study the history of successes and failures that have gone
before and learn from them.
Source: History of Affiliate Programs, by Shawn Collins,
ClickZ Network.
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About The
Author
Lori Wilkerson
is a full-time freelance writer who loves her work because it
gives her the opportunity to learn more about the world every
day. Right now, she knows a little bit about almost everything,
and a lot about
working at
home in her own
homebased business using a computer.
She has two dogs who are spoiled and one teenager who is not.
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