25 Years of Affiliate Marketing – How the Game Changed
25 years ago, in a galaxy, far, far away, affiliate marketing was born. Obviously, the Force Awakens hype hasn’t diminished yet! 🙂
We’ve been already talking about the importance of affiliate industry for both bloggers and e-commerce businesses, but many still don’t know how it actually evolved into one of the most valuable marketing trends.
The Background: How it all started?
The beginnings of affiliate marketing trace back to 1989, when William J. Tobin, the founder of PC Flowers and Gifts, started his own marketing campaign to promote his company via Prodigy online service. Similarly to what we know as the basis of affiliate marketing today, Tobin paid the Prodigy network a commission on every sale. By 1993, the program was generating more than $6 million dollars for Prodigy every year.
Meanwhile, numerous initiatives regarding affiliate marketing were developed. However, the most important is the one by Amazon that changed the game once and for all in 1996. Namely, they launched their associates program which pretty much shaped the affiliate industry and made it what it is today.
Back then, Amazon’s associates program sold only books, movies and music, but they paid around 5-15% commission on referred sales to their site. This is when websites started to realize they could also link to Amazon and snatch their cut in the process.
Affiliate Marketing Today: Choosing a Proper Affiliate Program for Online Marketers
Certainly, we could go to great lengths analyzing all the stages affiliate industry went through, but enough about history. It is far more relevant to address what the landscape of affiliate marketing looks like today.
Even though affiliate marketing was extremely popular when Amazon was reigning supreme, today it keeps growing by leaps and bounds. It has evolved into a multi-billion dollar industry utilized by both online businesses and bloggers as a primary source of earning.
Now, we’ve already discussed how the entire concept of affiliate marketing works for both online merchants and affiliates. But, there is another immensely important question here- what are affiliate programs and how can one choose the most profitable one?
In theory, defining an affiliate program is pretty simple. However, there is a lot of behind-the-scenes job that needs to be done in order to make this work properly. Namely, there are numerous aspects of the activity of the affiliate link to the merchant’s website that need to be tracked:
- the number of people who visit the e-commerce website’s link on an affiliate site
- the amount of visitors who make a purchase or perform some other action once they’ve visited the merchant’s site via the affiliate link
- the number of users who see the advertiser site’s banner link on an affiliate site
This is what affiliate networks are for. They are the connection between the publisher and the merchant website. What they do is measure all activity, organize payment and help affiliates establish affiliate links on their pages. In other words, one of the most important functions of those networks is to help recruit affiliates by including the merchant’s affiliate program in their directory.
Some of the Most Profitable Affiliate Programs
Parallel with the growth of affiliate marketing, the number of affiliate programs rose as well. What’s always important to keep in mind is that all those programs widely range in their reliability, scale and quality. The most popular ones are:
- Google AdSense
- Amazon Associates
- Commission Junction
- Clickbank
- LinkShare
What Trends to Expect in 2016?
The affiliate marketing landscape changes at the rapid pace, constantly offering new opportunities for affiliates to generate revenue. Furthermore, there are numerous trends that were initiated in 2015, but are expected to reach their pinnacle in 2016.
Enhanced Focus on Niche Marketing
During 2015, the stress was put upon the niche marketing, empowering affiliates to focus on narrow niches in order to improve traffic to their site, boost search engine rankings and gradually gain audience trust.
The basis of this trend is to create small subsets of consumers who share some specific interests and goals. Therefore, it is simpler to create meaningful, target content that would inspire specific target audience to make a purchase of the product they’re really interested in.
Integrating Mobile with Affiliate Marketing
The latest studies prove that the number of mobile users constantly grows. According to Statista, by 2019, there will have been 5.07 billion mobile users worldwide. With the ever-increasing number of consumers using smartphones, tablets and other wearables to make a purchase, online businesses also need to heavily rely on mobile-friendly apps and websites.
Today, going mobile is not optional – it’s completely mandatory. The ability to adapt to this idea is something that could make or break your business.
Similarly to any other industry, mobile opportunities keep expanding in the field of affiliate marketing as well. According to the recent Internet Retailer survey, 36% of all affiliate sales in January 2015 were conducted via mobile devices.
Applications for Big Data Statistics Given a Boost
Another trend expected to gain ground this year is the application of Big Data statistics. Namely, as more and more data becomes available to marketing experts, the need for this trend grows rapidly. Affiliate marketers can use Big Data analytics to determine their largest sources of traffic, who their optimal target audience is, as well as what practices are the most effective.
Finally, affiliate marketing has come a long way from its humble beginning. Today, on its silver anniversary, it enjoys more attention than it ever had. However, even though it is present for a quarter of a century now, its ecosystem keeps constantly evolving. Among all, it’s currently reflected in the increased use of mobility options, Big Data application and niche marketing. As for what will come tomorrow, even an experienced marketer could offer only some more or less reliable estimations.
