Affiliate marketing is a business model that has been around for a relatively long time, giving shops a new advertising structure. The first integrated and used affiliate program was developed on the Prodigy network, an online service created in 1984, created via a joint venture of IBM and Venture.

The Prodigy Network was conglomerated over a broad infrastructure designed to give paying users information regarding news, weather, banking stocks etc. The network aloud users to dial to their local server, which then connected tot he main networks server located in New York. This meant most times dialup was free, due to calling locally, but this ultimately ended Prodigys legacy as costs were ridiculously high. Prodigy had unique design ideas consisting of a GUI and socially intergratable concepts such as chat and email worked as one of the countries (USA) first online communities.

One of the first shops/companies to develop a computerized business model over the Prodigy Network was PC Flowers and Gifts which was implemented in 1994, a clear 10 years after the initial conception of the breakthrough network.

Pantent Number – US5576951
Mar 16, 1994 Nov 19, 1996 Automated sales and services system (1. Google Pantent)

The first internet patent for an automated sales system took time to clear, there was now the chance for a breakthrough regarding a technology that had never been thought about.

“The present server based communications system provides dynamic customization of hypertext tagged documents presented to clients accessing the system. The customization, which pertains to the content of the documents, is based on the specific requirements of a class to which the client belongs to..”” (2. Prodigy History)

After a while The Prodigy Network began creating advertisements on every one of its pages, ranging between $10-20k per advert. It became renowned for being the virtual shopping mall, allowing people to view and buy products they may never have. Following this PC Flowers began its patenting to create one of the first affiliate programs.

The Prodigy Network ran on extremely low speeds 1200bit/s to 2400bit/s. This meant PC and Flowers had to design a system capable of running optimal functionality with minimal challenges for download/upload speeds.

The Prodigy Network was generating greater traffic, and in 1994 alone PC Flowers and Gifts generated $6million in sales. After this they contributed a proportion of their earnings to the network directly. This is when the initial concept for affiliate marketing was developed. Further down the line, PC Flowers and Gifts decided to take their concept one step further, and released the use of affiliate programming to over 2,600 programs.

The social impact of such a concept would have been massive. It enabled the growth of e-commerce to a wider scale. At the times shops were dedicated concepts that had to be found uniquely, or through the basic functions in The Prodigy system. Affiliate connections meant advertisements were cropping up, enabling consumers to expand their browsing and purchasing range to try new products – it was the beginning.

Even though not many people ran computer systems in 1994, those who, and especially those who ran a service such as Prodigy would have had a greater disposable income, meaning shopping ‚online’ was an added bonus to a unique user experience.

Stepping forward ever so slightly, we can focus on the darker side of the internet, an area which has been at the forefront of modern design and implementation. The adult industry. There are rumors that the website Cybererotica was a pioneer in the affiliate world, even though it was developed and integrated after PC Flowers and Gifts patent. The adult affiliate networks ran a CPC model which has slowly diminished into a CPA model due to fraudulent reasons – this is also the case for nearly all adult affiliate networks now. In 1994 Cybererotica saw a gap in the market which could be filled. People had easy access to adult based content for the first time in their lives. Affiliate programs saw this gap, and knew that people would be interested in clicking on half naked individuals, just to see where the next page goes, and it worked. Today the same marketing models are still being used to obtain higher click rates on adult based websites, not much has changed.

Stepping forward ever so slightly more again, we enter the bigger picture, Amazon.

“Launched in 1996, Associates is Amazon.com’s affiliate marketing program. By linking to Amazon products and services you can add compelling content for your site visitors enjoyment and receive up to 10% in referral fees for doing so.

As one of the first online affiliate marketing programs, Associates has a 10-year track record of developing solutions to help website owners, Web developers, and Amazon sellers make money. Our latest innovations include aStore, OmakaseLinks, and Product Previews.” ( 3. Amazon)

Amazon took the idea of affiliating and expanded the concept. After starting in 1996, they realized other retailers would be interested in using their platform to sell products. The story goes that Jeff Bezos was in contact with a writer who was trying to advertise her book. Jeff decided to offer the writer hosting through advertisement of her publication in return for a percentage of the sales. From then on, more and more publishers and advertisers were interested, and Amazon pushed forward. Amazon services now cater for a vast proportion of affiliate marketing, covering different products all over the internet.

These early steps regarding affiliate marketing are key to where we are now. During those times computer use was much lower than now. Advertising agencies relied heavily on traditional media, such as print and television. The cost of such services is incredibly high. Startup companies or products had no easy way of encapsulating themselves in markets that were over flooded with traditional media. Internet marketing gave smaller companies a break, a chance to push their product to different consumers. Affiliate marketing took it one step further, and allowed advertisements to be directed to the relevant audience. Targeted ads enabled niche market companies to not waist money on mass advertising.

However back in 1996, the form of advertisement a consumer would receive would not be as subtle as todays affiliate programs. They were basic Flash or obtrusive images, based on buy now, in your face advertisements which started putting consumers off. Many times the direction of the advertisement was wrong, this was not something that was controlled at the time. People felt like they could not trust the links. This ideology continued for a long time. Most of the internet was being covered in adult based content, connecting to dialers and subscription pages. It wasn’t the greatest way to build a trusting consumer model.

The PPC (also known as Cost Per Click) principle was implemented in 1998 by Jeff Brewer of GoTo.com. This was the first time this concept was used effectively. However competitors began spam clicking other peoples adverts to increase their costs.

In 2000 Google released Adwords, the common affiliate program many of us still use to advertise on the Google search area with text ad placement. This system ran a CPM method (Cost Per Mille) which aggregates the CTR (Click Through Rate) and the CVR (Conversion Rate). CPM is a common form of advertisement as it judges one click over 1,000 views and estimates how much the campaign would cost you per thousand people. Google Adwords does not focus on this system as much now, and has tightened up its policy and regulations in terms of PPC.

Affiliate marketing is changing heavily even now. People are still creating their own affiliate campaigns, building their own links and arranging deals with advertisers or publishers themselves, but there are alternatives.

YieldKit is a great tool, developed by a startup team in Hamburg, Germany. YieldKit is a service that is free to use, and extremely easy to install, it just requires a short java snippet to be embedded into the index.html page. YieldKit allows automatic affiliation, giving you, the website owner, more time to spend on content and placement. YieldKit uses YieldLink, which converts existing or dead links into affiliate links. They also offer another service, called YieldWord. This tool scans your website, looking for keywords that could be converted into a text link.

“Take a look at the new iPhone 5, it has an amazing new camera”

YieldWord would convert iPhone 5 into a text link, which would forward you to a site connected in some way to the iPhone 5. These text links show the future. They are small, discreet, and still offer a high return to publishers. YieldKit is a product that changes the way consumers view affiliates, and works extremely well on sites that are networked and compiled with high level content due to its discreetness.

Through times concepts change and advance, there is only so much people can achieve on a platform that is beginning to stagnate. Hidden affiliation is becoming the new secret weapon with the use of tools like YieldKit.

One thing has to be mentioned, it is much easier for the standard everyday user to become an affiliate now. Anyone can create a blog, signup to Adsense, and begin a marketing campaign. In Mid 2000, everyone was spammed with messages like ‚Sign up now and earn $10k per month’. This method has now backfired, and the market is saturated with people trying to become affiliates. For a daily user, its great to try and earn some extra money with your site, install a product like YieldKit and your away. To become a profitable affiliate though, time, dedication and commitment are needed.

Times change for a reason, and we have to anticipatethe future. Mobile affiliate marketing is becoming huge, with different networks cropping up all over the web. We have to prepare, because even over the 20 year period since affiliate marketing came about, the implementation methods linked to affiliate marketing have changed dramatically.

Planning for the future is essential. credit-n.ru
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