Before you venture into affiliate marketing, you need to understand what it is and how it has changed the lives of many people…for the good and the bad…
If you don’t care about the history you can skip down to
Affiliate Marketing Tips 2013
Affiliate Marketing and How It has Changed the Internet
Marketing strategies have been around since the dawn of the sales business, and affiliate marketing has long been one of those approaches. Of course, when the Internet came into existence for the public back in 1982, people immediately found ways to change methods and use this new World Wide Web to gain more customer attention. It should be no surprise, then, that the first affiliate marketing plan to hit the web came about just two years later in 1984. Since then, affiliate marketing has become a commonplace method of building business both online and off. In fact, it is so widely used that the Internet powerhouse seller, Amazon, began using a plan back in 1996.
What Is Affiliate Marketing?
There are different methods of reaching out to customers, and often they use active marketing (like sending flyers in the mail, advertising on a billboard, or holding a big sale). Affiliate marketing is a bit different. In this case, the advertiser actually works through a third party; through a system that is widely performance based. Essentially, a business works with an affiliate who is responsible for creating the advertising. That affiliate will be rewarded for their efforts each time one of their visitors moves on to the base advertiser.
Here is an easier way to look at this – there are four different people or groups involved in an affiliate marketing plan:
- The Retailer
- The Network
- The Affiliate
- The Customer
A retailer wants to advertise their brand, so they put their offers out on the network. Then, the affiliate marketing participant can choose from those offers and create some type of advertising strategy. When the customer follows through the affiliate and the advertising to the original retailer, the affiliate is rewarded for their efforts.
The affiliates can use a variety of advertising methods for their plan, but on the Internet, the most common methods include:
- Search Engine Optimization
- Pay Per Click Advertising (PPC)
- Email Marketing
- Content Marketing
The Difference from Referral Marketing
Many people think that referral and affiliate marketing are interchangeable terms, but they work in two different ways. It is true that both use a third party to reach customers, but there is one big difference. In referral marketing, there is no reward. The business relationships usually hinge on pre-existing personal relationships.
In the case of affiliate marketing, the two parties may not have any connection to each other in advance. Instead, they are working on a financial reward based system. The affiliate chooses to advertise because they will receive financial compensation for their effort.
The Compensation Methods
There are several different methods for paying on affiliate marketing programs: pay per sale, cost per click, cost per action.
- Pay Per Sale (PPS)
This is the most popular of the affiliate marketing programs because it guarantees successful results. Affiliates are paid when customers actually make a purchase.
- Cost Per Click (CPC)
This affiliate marketing method is not as lucrative for the parent business since they have to pay out every time a customer clicks on their link. This could actually be costly since readers may click out of curiosity with no intention of making a purchase. However, obviously, this is more lucrative for the affiliates.
- Cost Per Action (CPA)
Not as well-known as other affiliate marketing methods, cost per action depends heavily on customers completing a certain action, like spending a specific amount of money or signing up for a newsletter.
Affiliate marketing is often the preferred advertising method for merchants because it almost guarantees results. With so many other advertising options, there is no guarantee that anyone will become a customer. Businesses could spend their whole budget on a blanket advertising program only to have a very small ROI (return on investment). However, in the case of affiliate marketing, the company only pays their advertising costs if they actually get customers, making it less costly and more successful.
When Did It All Begin?
As mentioned, affiliate marketing is almost as old as the Internet itself. Back in 1984, it was a concept created by business owner, William J. Tobin. He didn’t put his idea to work until 1989, though, when he first patented his Prodigy Network, an affiliate marketing plan he put into effect for his business, PC Flowers and Gifts. The process was so successful that, by 1993, the flower business had grown to a multimillion dollar corporation. Perhaps it was the success of this network that began to gain attention from other companies online.
By 1995, the PC Flowers and Gifts commercial website was working with more than two thousand affiliates. Additionally, Tobin himself had patented the program in both the United States and Japan, securing his place in this history. From 1989 to date, the program created by Tobin is still in place, and patents are sold to affiliate marketing corporations in the US and in Japan regularly.
What many people don’t realize is how Internet pornography is largely responsible for these affiliate marketing programs. Other than PC Flowers and Gifts, cybererotica is the earliest business to use it regularly on their websites. In fact, they were the first to start a cost per click or pay per click method of affiliate marketing and advertising.
One of the first larger users of affiliate marketing would be CDNOW. Through this website, customers were able to look up artist and song information as well as cover art for all types of music. Then, CDNOW would allow the customers to link directly to a sales website where they could purchase the album from BuyWeb. This affiliate marketing program was first implemented in 1994. In 2001, CDNOW was purchased by Amazon.
Perhaps when online affiliate marketing really took off on the Internet was in 1996. Amazon may have started with humble roots as a small online bookseller, but they soon became one of the main go-to places to purchase virtually anything (newest endeavors include groceries and eBooks). Amazon launched an affiliate marketing program which allowed anyone to sell their books or products. Called “associates”, these people could sell their item through the affiliate marketing power of Amazon and then receive a certain cut of the profit. Of course, Amazon also receives their own financial compensation through this plan. They are the second seller to receive a patent on their program, which was applied for in 1997 and made official in 2000.
Other companies who have created their own affiliate marketing programs include:
For some reason, in the history of affiliate marketing, Amazon has been known as the pioneer of the advertising method. However, there are numerous companies who predate the powerhouse’s own efforts. All of the above listed, including PC Flowers and Gifts predate Amazon and any of their efforts. Actually, owner Jeff Bezos and Amazon should be known as those who made the plan popular. Before them, affiliate marketing was little known.
The Pioneers of the Tracking System
It didn’t take long for business owners to realize they had a problem. Yes, they could get business through affiliates, but how much business were they actually gaining? How could they determine which affiliates were becoming the most successful and which did not do enough to reach new customers? A tracking system was needed, and it wasn’t any of the founders who created one.
In fact, the first company to come up with a tracking system for their affiliate marketing plan was Proflowers.com and Vice-President, Chris d’Eon. The program that they created was sold to ValueClick and has become a standard for tracking throughout the Internet world.
Early Beginnings and Humble Roots
Of course, before Amazon, affiliate marketing was not what it is now. In fact, it was originally called GPT (Get Paid To). In these early days, the only way it was used was through websites that allowed users to make money by doing certain things, like:
- Read Articles
- Stay On the Internet for a Specific Amount of Time
- Go to Certain Websites
- Take Surveys
- Join Groups or Mailing Lists
These “get paid to…” programs were the standard for affiliate marketing for several years. However, as affiliates found various loopholes in these methods, business owners soon realized it was not a quality method of making any money. This is what prompted the drastic changes in affiliate marketing plans.
With advances in Internet technology and changes in advertising, affiliate marketing became the standard for almost any product being sold online.
Scams, Spam, and Poor Business Ethics
If there is any method of making money out there, people will find a way to abuse it. Once affiliate marketing became popular, it wasn’t very long before these scammers realized something. They could create bogus, “spammy” websites, and make millions of dollars.
Essentially, they would create websites that claimed to offer a product for sale. However, this site would be spam heavy and so loaded with search engine keywords that they became hardly legible. The person could then use these sites to rake in the cash, claiming to be a legitimate business.
Before people realized just what was going on, there was a deluge of affiliate marketing scams. As long as the pages were loaded with search engine keywords, they would show up first in the rankings. The result was chaos that gave affiliate marketing a bad name and cost plenty of people millions of dollars. Unfortunately, some scammers became millionaires through their “efforts” and then walked away before anyone recognized the problem.
Search engines had no way of dealing with affiliate marketing scams until Google. This search engine, like Amazon, had humble roots, but has since grown into an unstoppable company that essentially controls the frontier of searching the Internet. Ask anyone and you won’t hear them say “let’s Alta Vista it” or “Yahoo it and find out”. These two are both search engines, but they have been, like almost everyone else, left in the shadow of Google. The term “Google it” has become synonymous with searching the Internet. It’s no surprise, then, that Google is responsible for shutting down the vast majority of affiliate marketing scams.
In February of 2011, Google rolled out an update that virtually changed the front of the Internet. Something that sounded so innocent was actually the bane of many affiliate marketing scammers. Called the Google Panda update, this changed the whole algorithm that is used for search engine results.
2013 Affiliate Marketing Tips…to help you stay above the thousands of Internet Marketers
1. Stay current with Google…or Google will make sure you never see the light of day!
In the past, search engine algorithms looked at individual pages. That meant advertisement heavy, spammy sites could easily stay at the top of the rankings. In fact, sites could include the exact same content page after page with no punishment, allowing scammers to run rampant. The second that the Google Panda update was rolled out, everything changed. A few of the differences in the new algorithm include:
- The Over-Optimization Penalty, which actually penalizes websites if they are stuffed with search engine keywords.
- The whole site is looked at before it is search engine ranked, not just the individual pages.
- Pages that included duplicate or rewritten content are punished.
- Content must include valuable information or the site will be punished.
When the update was rolled out, thousands of “scammy” affiliate marketing websites immediately dropped in the rankings. In fact, any site that included heavy advertising or implemented keyword stuffing were immediately punished. Websites that were actually useful, like social networking and news, gained in the rankings almost immediately as well.
The purpose of the Google Panda update is to make Internet search engines more successful with more results that offer quality information.
The websites that were rewarded and immediately started getting more attention include:
- News Sites
- Social Media
- Academic Sites
- Law Pages
Spammers weren’t the only ones punished by the new update. In fact, numerous small business pages and bloggers took a blow during the rollout because they relied heavily on advertising and may not have provided high quality content. However, these legitimate pages and companies were actually able to recover fairly quickly by making simple changes to content.
The losers who continue to struggle from the results of the Panda update include:
This list, by no means, implies all of these sites are spammers or scams. However, they do depend heavily on duplicate content that causes their pages to be punished by the update.
2. Creating a Branded Name – You got to get off the bench and get in the game
You have to start getting social. People need to see your face…
….they need to see your presence and they need to trust you….
- Google + Account
- Facebook Fan pages
- Linked In
- and other media sources….top 3 are my highly recommended avenues when starting out.
3. Offering Real, Easy to Find Customer Service
Dude, your out asking people to buy from you, and you better be able to answer questions and answer them fast. If you don’t, they will cancel and leave you. That is why I love the company I promote so much, there is not much customer service to deal with… 🙂
more time for me and my family!
4. Master only 1-2 traffic driving techniques
People just don’t get it, and it breaks my heart. If you are looking to make money online understand the basics.
- Pick a high volume niche
- Create a small, cheap easy to use blog
- Spin a product within that blog
- Drive some links and good content
- Free traffic will come
That is all people need to know. If you get that concept, all the little concepts are just lessons you will learn along the way.
FYI, I always suggest to join me if you want to cut years off the learning curve and you want to learn from a high ticket blogger and 6 figure earner….just saying…
5. Have a mentor – So they can help you succeed
I owe it all to my mentor who continues to mentor me day in and day out…maybe not via phone, but just by his unprecedented content….as we call it killer content!
Maybe I can help you, but if not, I know my ALMOST 7 figure blogger mentor can and you get all his resources if you work with me.
So it’s like double dipping in the dip, you know, you get me 6 figure a year earner and my boy Brad, an almost 7 figure a year earner…
Doesn’t get better than that!
I buy and review courses so you don’t have to. Sometimes, I even find courses that are legitimate and worthwhile; and that’s how I accidentally came across one that led me to building a 6-figure business in a little under 5 years. Now, I still review courses because it’s my favorite hobby. 🙂 Learn more about me here.