The idea of revenue sharing, in which a commission is paid for all referred business, is an idea that was conceived before the advent of affiliate marketing, and the Internet itself.
The World Wide Web was launched in November 1994. The adoption of this revenue sharing concept by e-commerce, which consists of the buying and selling of products and services over the Internet, occurred almost four years later.
It is a widely accepted fact that Cybererotica was among the early instigators of affiliate marketing with the introduction of a cost per click program, which relates to the amount of money an advertiser pays search engines and other Internet publishers for a single click on its advertisement that brings one visitor to its website.
In 1994, CDNOW launched its BuyWeb program in which it represented the first non-adult website to introduce the concept of an affiliate or associate program with its idea of click-through purchasing, where Click-through rate or CTR is a way of measuring the success of an online advertising campaign.
In this way, the CTR is derived from the number of users who clicked on a web page ad divided by the number of times the ad was presented, called impressions. For example, if an ad was presented 100 times and one person clicked on it, then the CTR would be 1 percent.
CDNOW realised websites that had a bias towards music could list albums on their pages that their visitors would be able to purchase. Such websites could also offer the visitor a portal that would direct them to CDNOW in order to make their purchases.
This idea of remote purchasing was first muted by music label Geffen Records in 1994 who wanted to sell its artists’ CDs directly from its website, but did not want to get directly involved itself. They asked CDNOW to implement a system in which CDNOW would handle the order processing. In this way, CDNOW could connect directly the artist on its website to Geffen's website. Such a system would avoid the CDNOW home page and go directly to the artist's music page.
Amazon launched its own system in 1996. This enabled an individual who subscribed to the programme to either place a banner or text link on their website, or link directly to the Amazon home page. With this system, whenever a visitor clicked on the associate's website, they were redirected through to Amazon. Should they make a purchase, the associate would receive payment in the form of a commission.
The first merchant to make an affiliate program available to those who signed-up was, in fact, not Amazon. However, their programme was the first to become widely accepted. Furthermore, it went on to act as a yardstick for other programmes.
Its pre-eminence was further established in February 2000 when Amazon announced that it had been granted a patent relating to all the essential components of an affiliate programme. The patent application was presented in June 1997, at a time when affiliate programmes had only just established a presence on the internet.
Affiliate – How To Succeed
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