History of Affiliate Marketing

Like many eMarketing innovations, the beginnings of affiliate marketing are to be found in the Adult industry. Cybererotica was probably the first to run an affiliate campaign with its CPC programme, where it would reward referrers for each click-through to its web site.

Affiliate marketing moved closer to the mainstream, with programmes offered by companies such as CDNow (its BuyWeb programme launched in 1994), PC Flowers & Gifts.com, AutoWeb.com and a handful of others. But the story that is most well known, and that ensured that affiliate marketing hit mainstream press articles, is that of the Amazon.com Associates Program.

Legend has it that Jeff Bezos (the CEO and founder of Amazon.com) was at a cocktail party, where a woman there told him that she wanted to sell books through her web site. She did not have the infrastructure to sell the books, but Jeff Bezos realised that she could send her targeted traffic to Amazon.com where users could buy books, and she could get paid for each successful referral. From this, Jeff Bezos launched Amazon Associates, the Amazon.com affiliate marketing programme. Referrers are rewarded for successful sales that occur as a result of their marketing efforts. The growth experienced by Amazon.com as a result of their affiliate programme is well documented, and probably accounts for about 40% of their revenue (according to information in Amazon.com discussion forums).

According to eConsultancy’s Affiliate Marketing Networks Buyer’s Guide (2006), total sales generated through affiliate networks in 2006 was £2.16 billion in the UK alone.

And MarketingSherpa’s research estimates that in 2006, affiliates worldwide earned $6.5 billion in bounty and commissions!

Affiliate networks, which act as intermediaries between affiliates and merchants, came onto the scene in 1996, with the launch of LinkShare and Be Free. Commission Junction, another big player, launched in 1998 and was bought by ValueClick (Nasdaq: VCLK) in 2003 for about $58 million.