History of Affiliate Marketing

The concept of paying commission for referred business was first introduced by adult sites in the early days of the Internet, with Cybererotica either the first or among the early innovators in affiliate marketing with a cost per click program.

The first non-adult website to introduce the concept of an affiliate or associate program was CDNOW in 1994, with its idea of click-through purchasing. The site had the idea that music-oriented websites could review or list albums on their pages that their visitors may be interested in buying, and could offer a link that would take the visitor directly to CDNOW to purchase the albums. During November of that year, CDNOW launched its BuyWeb program.

Two years later, in July 1996, Amazon.com launched its associate program. Amazon associates could place text or banner links on their site for individual books, or link directly to the Amazon home page. If a visitor clicked from the associate's website through to Amazon and purchased a book, the associate would be given a commission. Although Amazon was not the first merchant to offer an affiliate program, its program was the first to become widely-known and serve as a model for subsequent programs.

Affiliate Solution Providers

The first affiliate solution providers were seen in 1996, with the launch of Be Free and LinkShare. Two years later, Commission Junction started up to add to what is now thought of as the 'top three'.

Affiliate Program Directories

In October 1997, James Marciano founded Refer-it.com to provide a search engine for affiliate programs with ratings and details. In January 1998, Allan Gardyne started up a one-page associate programs directory, which officially became AssociatePrograms.com in February 1998. Other important players, such as 2-Tier, Associate-it, CashPile.com, and ReveNews.com, launched later in 1998.

Affiliate Marketing Today

Since its inception in the 1990s, affiliate marketing has grown quickly. Initially seen as a marketing toy in the early days of the Internet, the e-commerce website has become an integrated part of many companies' overall business plan and in some cases has grown to a larger business than the existing offline business. Research has shown that affiliates across the world earned US$6.5 billion in 2006 from a variety of sources in personal finance, travel, retail, gambling and gaming, education, telecom, publishing, and forms of lead generation other than contextual advertising programs such as Google AdSense. According to one report, the total sales amount generated through affiliate networks in 2006 was £2.16 billion in the UK alone.

Today, the most active sectors for affiliate marketing are the gambling, adult, and retail industries, although the mobile phone, finance and travel sectors are expected to experience the greatest growth in the next few years.