History Of Affiliate Marketing & Why It Is Effective
Affiliate marketing is now one of the most popular ways for people to create a side hustle and make money online.
According to HostingTribunal, the Affiliate Marketing industry is worth $12 billion and it’s growing fast.
Companies like Peerfly and Awin handle billions in revenue for countless clients by providing affiliate publishing services and top affiliate programs including Clickbank, Amazon Affiliates, eBay Partner Network and Rakuten Linkshare.
Even if you’ve never heard of these affiliate programs, odds are your friends, family or favorite influencer has either made or spent money through an affiliate link.
This blog will answer the question, “Why affiliate marketing is so effective?” by giving you a full overview of the history of affiliate marketing and current state of the AM industry.
The History of Affiliate Marketing
According to SkimLinks, Modern affiliate marketing was the creation of William J. Tobin in 1989, whose PC Flowers and Gifts went on to make $6 million in 1991. Other affiliate programs evolved throughout the 90’s as technology developed.
CDNow and Refer-It were successful in the late 1990’s and the U.S. Federal Trade Commission published its first guidelines for Internet Marketing to begin regulating the rapidly growing industry.
Since then, affiliate marketing has become one of the most popular promotional methods for companies with websites, even the largest retailers in the world use affiliate marketing, including Walmart and Amazon.
With the digital age now upon us, almost every company has some kind of affiliate program or refer a friend rewards program.
Rather than investing in traditional ads such as radio, newspaper, phone book ads and TV spots, companies now rely more heavily on digital marketing tactics like affiliate marketing to reach their audiences.
As affiliate marketing is way more cost effective, because a company only pays out money when a sale is made.
Affiliate marketers do the selling for businesses.
How Affiliate Marketing Works
Affiliate marketing is the process of partnering with other companies to sell their products or services. You can sign up to be an affiliate partner for a company and whenever someone clicks on the specialized links you share and then purchases something, you make a commission.
You are in essence a salesman for other companies, not as an employee, but as your own business.
Any marketing program that uses a third party (affiliate) to reach customers is using affiliate marketing. Instead of paying the affiliate up front for spreading their message, companies will pay a percentage to the affiliate after each transaction.
This exchange is low risk and high reward for both sides.
The business does not have to go through the effort of creating engaging advertisements and delivering them to viewers. Instead, they can outsource the job to influencers and content creators who already have the attention and trust of their target audience.
For the affiliate, they are getting paid to deliver authentic reviews and advertisements of products they are already passionate about. They can make the ads non invasive and low maintenance while still turning a huge profit via passive income.
63.7% of affiliate marketers invest around $500 before earning anything from their affiliate marketing business efforts. This is expected because there are certain marketing tools one needs to be effective with marketing products and services online.
Affiliate marketing is an attractive endeavor because there are no limits to how much money you can earn. However, it might take some time before you start generating affiliate marketing income, as you will have some learning curve.
Read Also: Best Affiliate Marketing For Beginners Guide 2022
The Current State of The Affiliate Marketing Industry
Popular markets including Fashion, Retail, Media, Finance, Business, Make Money Online, Travel and Leisure are all heavily involved in the current AM industry.
Large and small retailers and businesses will reach new clients with offers through micro or macro influencers for no up front costs.
And as more and more businesses move online, affiliate marketing is growing at an extremely high rate and Affiliate marketing spending in the US could reach $8.2 billion by the end of 2022.
Why Is Affiliate Marketing So Effective?
The science behind AM’s success is simple.
Every customer and owner knows that word of mouth is the most powerful form of advertisement. But affiliate marketing is even more powerful than word of mouth.
The Internet has made it possible for customers to review and rate every business or product on the planet. The networking effect that makes social media addictive and causes memes to go viral also applies in Affiliate Marketing.
When you connect all those factors, you have a powerful formula for reaching customers with valuable products and services at scale. And that sounds like every business owner’s dream.
Even if you don’t own a business that needs to advertise with affiliates, you can create passive income by becoming an affiliate yourself.
If you have a small following on social media, a respected podcast in your niche community, or a topic you are passionate about, you can find an affiliate product that leverages your skills into passive income.
How Much Do Affiliate Marketers Make?
The average annual passive income for affiliate marketers, according to PayScale, is $51,779.
More precisely, the bottom 10% of marketers earn approximately $38,000 a year, while the top 10% make around $90,000. Glassdoor’s data says that the average yearly earnings for affiliate marketers are around $66,000. 17% make over $1 million yearly.
History Of Affiliate Marketing Final Thoughts:
Affiliate marketing is a great way to make money online for both businesses and individuals. You can earn commissions by simply promoting other companies products or services, without having to do any of the customer support or product delivery.
In other words, the companies keep all the headaches, you make the money!
There are many different affiliate programs out there, so you should choose one that best fits your interests and goals.
Are You Ready To Make Money Through Affiliate Marketing?
It’s way easier to get started than you might think!
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We really hope this article on the history of Affiliate Marketing has been extremely helpful to you. If you have any questions, don’t hesitate to post them in the comments section below or just say hello.
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