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What is Affiliate Marketing?

Written by admin on July 8, 2008

Affiliate marketing has quickly become one of the most popular and the most effective ways to advertise on the Internet. The premise of affiliate marketing is simple.

A company, for the sake of this article we’ll call them eBay, goes to another web site and asks them to place a banner or link to eBay on their site. Every time a user clicks on that eBay banner and visits the site, the owner of the original site gets a commission. It’s as simple as that, and no less.

you can say the history of affiliate marketing dates back to 1994 with the music website CDNow. As most people know CDNow was the first site to pay other sites for directing targeted traffic to their site. Later some would say that Amazon soon jumped on and became the site most associated with affiliate marketing. The practice of affiliate marketing nowadays is used by essentially every major web site in the world.

Why affiliate marketing?

One of the reasons that affiliate marketing has proven to be so popular is that it is completely based on performance. In most cases, the company doing the advertising doesn’t pay a single penny to the site that is carrying their ad unless there is evidence that traffic is being driven to the advertising site. There are other ways of doing affiliate marketing.

Some sites pay the site hosting their link based not on the number of times an original IP visits through the link, but on the number of times the banner ad was “seen.” This method presents a whole host of problems since things like hit counts can be forged and there is no way to insure that just because someone visited a web page that had your logo on it that they even saw it or if they did, that they even knew what it was.

There are other methods of affiliate marketing such as paying only when a link is followed and some kind of transaction takes place. This can be tough on the site hosting the link because the attention span of the average Internet user isn’t long enough in most cases to follow a link and then either complete a purchase, or fill out a form of some kind. The conventional method simply pays a host a commission for every time an original IP is directed to their site.

In a matter of only a few years, affiliate marketing has become one of the most cost effective ways to drive traffic to a site. Since, in most cases, both the advertiser and the host profit from the set up, there is no reason to believe that affiliate marketing won’t be a dominant advertising method well into the future.