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Affiliate Program History

Invented by CDNow.com at the end of 1994 and pioneered by Amazon.com in 1996, "affiliate programs", also known as Associate Programs or Partner Programs, are a simple way for Web sites to generate revenue by directing traffic toward other sites and a great way for the operating site to increase its traffic and revenue.

Because affiliate programs are so convenient and work so well, they have become the industry's dominant method of online Marketing.

There are 4 different kinds of affiliate programs to compensate "Affiliates" (or referring sites) for generating traffic to the Affiliate Program operating Website: Pay-Per-Impression, Pay-Per-Click, Pay-Per-Lead and Pay-Per-Sale.

Pay-Per-Impression (CPM)

Cost-Per-Mil (Mil = 1000) Impressions. Publisher gets from Advertiser $x.xx Amount of money for every 1000 Impressions (Page Views/Displays) of the Ad. The Ad can be Text (AdSense), Banner Image or Rich Media.

The Pay-Per-Impression and Pay-Per-Click Model are not common to be used in Affiliate Marketing anymore. They were used in the Past, but were mostly abandoned due to Fraud and lack of Results.

The CPM (cost-per-impression) compensation Model was revived by Google for Google AdWords in summer 2005. The feature is called "Site-Targeting" in AdWords and allows you to display your Adsense Ad on a specific Website that runs AdSense Ads.

Pay-Per-Click (CPC) Model

Cost-Per-Click. Advertiser pays Publisher $x.xx amount of money, every time a visitor (potential prospect) clicks on the advertiser's Ad. It is irrelevant (for the compensation) how often an Ad is displayed. Commission is only due when the Ad is clicked.

Like the Pay-per-Impression model was the Pay-Per-Click (PPC) Model popular during the dot com boom at the end of the 1990th but was mostly abbandoned by Advertisers for Advertisements on other Websites due to rampart problems with click fraud.

The PPC Model was kept alive by the PPC Search Engine GoTo.com which became later Overture.com and is now owned by Yahoo! and renamed from "Yahoo Sponsored Search" to Yahoo Search Marketing.

Google launched their PPC Service AdWords in 2000. Ask Jeeves, now simply Ask.com followed with their PPC Service in 2005 called Ask Sponsored Listings and MSN.com in 2006 with AdCenter. Other PPC Services are Miva/FindWhat.com and 7Search.com.

Contextual Advertising

The big come-back of PPC came when Google launched AdSense in 2003, the birth of contextual Advertising. What is Google AdSense? Here is a quote from Google's History at Google's corporate Website.

Google AdSense: "... offering web sites of all sizes a way to easily generate revenue through placement of highly targeted ads adjacent to their content. Google AdSense technology analyzes the text on any given page and delivers ads that are appropriate and relevant, increasing the usefulness of the page and the likelihood that those viewing it will actually click on the advertising presented there."

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