The Origin And Future Of Affiliate Marketing

Last Updated: October 19, 2021

Geoffrey

Geoffrey

The affiliate marketing industry has grown immensely throughout the years. It started from an online flower shop and has grown into a multi-billion-dollar industry. Learn more about the future of it here.
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In the digital age of advertising, companies resort to creative and innovative ways to improve their sales. One popular strategy is affiliate marketing.

Basically, companies pay their brand advertisers commissions for every successful sales referral.

Who Are Involved?

To make this strategy work, there are several parties involved: 

  • Sellers: business brands or retailers who produce the products and services to be advertised and sold.
  • Affiliates: individual or company advertisers who promote third-party products and services across different channels and online platforms.
  • Customers:  the consumers who buy the products through the referral of an affiliate.

It’s actually a win-win for everyone—companies get to sell their products while affiliates earn from their commissions; and customers, with a bit of influence, get the product or service they want.

With affiliate marketing’s high success and turnout, more companies have introduced various affiliate programs, which aim to help interested individuals. 

For beginners, there are affiliate marketing courses where you may learn the tricks of the trade. However, if you’re eyeing to get into one, it’s best to check online reviews first.

For example, check out the Wealthy Affiliate review if you’re interested in the courses they offer.

This will help save you from potential scams; and risks that may not be really worth the investment.

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affiliation affiliate marketing pay per click vector illustration

How It Started

Informally, affiliate marketing has been in practice for a long time. Back in the day, entrepreneurs would pay people commissions for introducing their products to new customers and referring clients to their businesses.

It wasn’t until the mid-1900s that an online flower shop, owned by William Tobin, decided to incorporate affiliate marketing into his business’ website. 

William Tobin is responsible for coining the term ‘affiliate marketing’ and creating the first online affiliate program, which he successfully patented after some time.

Since then, there’s been a steady rise in the number of companies that implement this online strategy.

Growing companies, at that time, adopted Tobin’s methods and developed their own referral arrangements.

Amazon created their Associates Program, which was the first program to be generally open to the public, allowing anyone to sign up and offer links. 

Affiliate Networks 

There was also a demand created by small businesses to participate as sellers, which paved the way for affiliate networks to materialize.

Commission Junction and Clickbank have, since then, dominated the affiliate network industry, which allowed companies to connect with different advertisers and affiliates.

Startups and small businesses, who have signed up with an affiliate network, can expand their reach without having to spend so much time and effort just to create their own programs.   

Affiliate Program

Through an affiliate program, advertisers will be given a Uniform Resource Locator (URL), to be incorporated into different online content or website banners.

This URL will be tracked by merchants to verify sales for proper crediting.

Affiliates will earn commissions only when customers buy a product through the affiliate’s URL.

Affiliates usually earn by generating sales but some companies may also offer Pay Per Click (PPC) or Pay Per Lead (PPL) advertising. The amount an affiliate earns depends on the number of times their link is clicked or the number of qualified leads they generate.

How It’s Going

Today, affiliate marketing is thought to be worth USD$12,000,000,000 worldwide and it’s showing no signs of slowing down.

Globally, affiliates cover 16% of online sales, which makes it a very effective sales driver. There’s no better time to get into the affiliate marketing industry than now.

Business owners can utilize networks to expand their reach, while affiliates can earn a steady income through consistent sales or referrals.

The Future Looks Bright

Affiliate marketing has become an integral part of digital marketing and it’s expected to become an USD$8,000,000,000 industry in the U.S. alone.

While growth may create an oversaturation in the market, it’ll also push the industry to diversify and evolve from the marketing practices today. 

The challenges of the pandemic brought about the rise of e-commerce and online shopping.

With this, business owners will still turn to affiliate marketing programs to reduce advertising costs without compromising their online presence. 

Continuous Evolution

Affiliate marketing trends can be hard to keep up with, especially with the changing demands of consumers and evolving standards.

Additionally, business owners will also have to study various driving forces that affect their consumers’ buying behavior.

Many influencers have increasingly engaged in affiliate marketing. More companies are tapping on individuals with a huge following to tell their stories and promote their products.

Brands are also looking for more authentic content, such as product reviews and unboxing videos, both of which attract more consumers. 

The format of how affiliates advertise will likely shift from blogs to videos. Creating videos, such as vlogs and short explainers, make way for visual experiences that would engage consumers.

Affiliate programs may also become more localized, with retailers targeting a certain population or demographic. 

Conclusion

To summarize, the affiliate marketing industry has grown immensely throughout the years. It started from an online flower shop and has grown into a multi-billion-dollar industry.

This strategy has provided an opportunity for businesses and advertisers alike to create a steady flow of income.

Affiliate marketing is expected to grow and evolve. Expect changes in its medium, format, target audience, and choice of affiliates.

As for consumers, they’ll remain to play a vital role in shaping the path where affiliate marketing will be heading into. 

Written by Geoffrey