subject: Affiliate Marketing - Winding Path Trodden and the Long Way Ahead [print this page] The relationship between a principal and an agent has been employed profitably in business since a very long time. The agent refers business to the principal company on which he gets a share of the revenue or a commission. However, on the internet this model has been introduced recently. It is a widely known fact that the pioneers of the commission model on the internet business arena was the online adult entertainment industry.
The first mainstream business entity to embrace the model of associatemarketing on the web as CDNOW in 1994. They came up with the idea that websites that are based on music or artists could provide reviews, list current and previous catalog records and then ultimately provide a link for the visitors to click and purchase an album from CDNOW.
The still widely popular Amazon followed suit in 1996. They started by using banner ads for books on associate websites to link back directly to their home page. Though they were not the first to offer an affiliate program, Amazon became hugely popular and the benchmark in the online marketing industry. In 2000, they went ahead and actually patented the structure of their affiliate program. Even today, Amazon is among the front runners with turnover worth billions of dollars in online sales.
The internet marketing industry has witnessed massive expansion since its humble beginnings. The affiliate website has gained large prominence in the overall advertising and sales strategy and business plans of corporates. It is a well known fact that in many cases, associate driven sales have far outnumbered the traditional advertising and marketing models. It was estimated that in 2006, the affiliate programs world over have raked in profits worth 6.5 billion dollars in commissions.
It helps that online advertising is far more targeted and cheaper than conventional advertising. You can reach your targeted customer profile for a much smaller advertising budget and it is just logical that your sales per advertising dollar are going to leapfrog.
Now other sections of the business world are also taking on the online marketing model by storm. Retail, gambling and the adult entertainment industry are the most common ones. Besides, travel, personal finance and cell phone companies are also taking to on-line marketing in a big way. In fact, they are expected to form a large component of the internet marketing industry going forward. Given the circumstances and the trends, it is logical to expect the online advertising budgets of corporates increasing drastically and that in turn with further fuel the growth of the affiliate marketing industry. For the associates, this is a golden period and recession doesn't seem to ring a bell for them.
Though it is not expected that companies will stop advertising offline, it may very well be that they start to use both mediums complementary to each other. This doesn't mean bad news for affiliate marketers. In fact, this may turn out to be good news because customers who view offline advertising may turn to the internet for further information or for their purchase. And in doing so, if they reach out to an referring website, the online marketers stand to gain. "Make hay while the sun shines" - is an apt quotation for the assoc
