Using Affiliate Marketing As a Consistent and Profitable Marketing Strategy

CDNOW is a company that decided to provide their visitors with an online store called “Buy Web” in November 1994. This company acted not too long after the Internet’s world wide web (www) was created. Visitors clicked through to buy articles separately from the physical storefront and this proved to be the first profitable form of affiliate marketing. Other e-commerce websites and online stores followed the trend, such as Amazon.com, and created similar programs. Affiliate marketing has evolved and become a popular method for merchants to advertise and sell their goods and services. For several merchants, it makes up a large part of their marketing strategies because it’s cheap, almost risk-free and most importantly, effective.

In the beginning, Cost-per-Click (CPC) systems were most commonly used. In these systems, the affiliate placed advertisements on his or her website and the merchant would pay the affiliate for every advertisement or email that took visitors to the merchant’s site. It didn’t take long for merchants to realize that fraud was occurring and some people were doing false advertising, using spam techniques, creating adware, adding tracking cookies, implementing forced click techniques and stuffing keywords for Search Engine Optimization (SEO) purposes, all in an effort to take advantage of this CPC system.

Needless to say, CPC isn’t so popular anymore and merchants now prefer the less risky methods of Cost-per-Action (CPA) or Cost-per-Sale (CPS). With these techniques, the merchant pays a commission or shares his revenues with an affiliate when a visitor buys products or services from them after visiting the affiliate’s site. These methods are preferred because they offer little to no risk for both the affiliate and merchant.