Affiliate marketing, in which online retailers pay commissions to other sites for traffic or referral-driven sales from those others, has come a long way from its humble beginnings.
Before Amazon popularized the concept in 1996, William J. Tobin, founder of PC Flowers & Gifts, had already established himself very well by starting his own affiliate marketing campaign.
By 1993, PC Flowers & Gifts was generating annual revenues of more than $ 6 million.
Since J. Topin and Amazon, this performance-based marketing strategy has spread and evolved into an industry of its own.
Over the years, we have witnessed many marketing models such as CPM (cost per impression), CPC (cost per click), CPA (cost per action), and pay per sale.
Programs like Google AdSense, Clickbank, and Amazon Associates, meanwhile, have arrived on the scene as affiliate marketers leveraging big data analytics to optimize their marketing efforts.
Affiliate marketing, in fact, is now a mainstay in the world of online marketing and advertising.
Advertisers increasingly prefer to use it to run ads themselves; The fact that many people now use ad blockers only serves to establish the importance of affiliate marketing.
In fact, using this strategy helps advertisers lower their marketing budget costs while taking advantage of advertisers’ (publishers’) promotional channels to drive conversions and sales.
Affiliate networks
One of the biggest victories in the affiliate marketing industry came in the form of the introduction of affiliate networks. This affiliate marketing structure is simple in its goal: it acts as a bridge, a meeting point for publishers and advertisers to meet and conduct business as smoothly as possible.
It is a kind of “Fiverr” for advertisers and Internet marketers.
Previously, affiliate networks, advertisers, and publishers had to find themselves – a tedious and expensive task compared to the way affiliate networks currently negotiate these relationships.
Affiliate networks are virtual marketplaces that offer advertisers access to a group of publishers (or potential affiliates) to choose from, and vice versa.
Why these networks are successful
Affiliate Networks Work: The vast majority of advertisers today – a whopping 83 percent, according to a Forrester Group survey – use them to secure publisher deals, and there are many reasons for this.
One reason is that online consumers have become more critical of online content, which means that they have been increasingly valuing the content they offer which they perceive gives them the most relevance and engagement.
Advertisers know what content their audience needs and can create it themselves.
However, they quickly discovered that trying to create and distribute such content on your own can seriously reduce your resources without having the desired return on investment.
Therefore, affiliate networks make it easy for these advertisers to link with relevant publishers.
Advertisers can outsource most of their content marketing responsibilities to these publishers, while also gaining a larger target audience that would have been unaffordable without that editorial relationship.
What’s in it for editors? The simple answer is income. According to this Business Insider report:
Affiliate marketing effort commissions are the fastest route to revenue growth for publishers, accounting for 15 percent of their revenue, thanks to those affiliate networks that make it easy to access offers.
How are affiliate networks positioning themselves for the future?
In our fast-paced, ever-evolving digital world, it is suicide for any company to sit back and enjoy its past success. Affiliate networks understand this and are constantly tweaking their offerings to remain relevant and attractive to publishers and advertisers alike.
According to the aforementioned Forrester Group survey, publishers particularly love to search for affiliate offers across networks that are global in their perspective. Affiliate networks are responding by trying to negotiate exclusive deals with global brands in order to sweeten the deal for publishers and stand out.
Where startups fit
The need for networks to constantly adjust and modify their offerings has left the door open for newcomers to the industry to establish and perhaps gain some market share thanks to industry heavyweights such as ShareASale and CJ. Affiliate.
A recent example is the admission of Alexander Bachmann, a well-known European affiliate network that has recently expanded aggressively in North America and Asia.
The company is obviously looking to position itself as a technologically preferred option as it works on developing technology priorities in the area of fraud prevention, fingerprint and cross-device tracking, ad-blocking technology, and more.
However, publishers and advertisers should still be wary of these networks, both new and old, as they experiment with new technology and features to improve what they have to sell.
However, one thing is for sure: Affiliate networks are here to stay and will only increase as they improve their offerings and take on more marketing and market share responsibilities from other affiliate programs.
