Mention "affiliate marketing" and many folks automatically will associate the term with Amazon.com's Associates Program. Around since July 1996, the program uses specially formatted links on affiliate sites that drive traffic to the section of Amazon most relevant to the merchandise being sold. For providing the link, merchants and other service providers can earn up to 10.5 percent commission.
Inarguably, the ever-swelling ranks of affiliates -- now more than 900,000 strong -- speak to Amazon's program's institutional status in the world of online affiliate marketing. Institutional, yes. The highest profile, yes. An innovator? Of course. But the inventor and founding pioneer of Internet affiliate programs? No, not by a long shot.
Affiliate pioneers
Sometimes, quantifying "the first" in anything can be a judgment call. Who discovered America? Christopher Columbus, Amerigo Vespucci, a nameless Viking warrior, the "one giant step for man" leader of a tribe of Bering Strait-crossing Siberian natives? Just as that fact is debated, so is the founding heritage of online affiliate marketing.
Internet marketing consultant Shawn Collins, author of "Successful Affiliate Marketing for Merchants," believes that the first true Internet affiliate marketing program was offered by a site that might just make you just feel a little uncomfortable: Cybererotica, which first hit the then-nascent Web in 1994 and is still going strong with a diverse menu of adult consensual imagery.
Cybererotica's affiliate programs have morphed and broadened over the years. A "Webmasters" link on the photo-chocked home page leads to Follow Me Free, Cybererotica's leading affiliate plan. The main Follow Me Free page () contains the, ahem, bare essentials. These include $55 payment per active member, 40 percent payment of dialer revenue, plus the potential of link-driven extra revenue with a weekly payout.
Far less explicit -- but also driven by "eye candy" -- is Danni's Hard Drive, which also made its debut in 1994. Its Webmaster program is called Danni's Cash, and has been in effect almost since the beginning.
The business model here is a steady supply of free photo and video content, supplied by Danni's Hard Drive and freely made available for posting on member sites. When subscribers click on these links they are routed to specific pages on Danni's Hard Drive.
The referral sites, in turn, get a per-click payout from Danni's Hard Drive. Dispersed every two weeks, the payout is based on a sliding scale "conversion rate" calculated on the number of new subscribers the referral site has delivered to the amusingly named Danni's HotBOX service. In order to be paid, the affiliate's conversion rate needs to add up to at least $100 for the most recent two-week period.
Not long after Cybererotica and Danni's Hard Drive made their debut in 1994, new Web sites with other types of material to sell were established with affiliate programs in tow. That year saw the emergence of PC Flowers & Gifts.com, a site that while defunct, leads visitors to diversified gift retailer Fiji's.
The Secret Sauce… a patent application?
PC Flowers and Gifts' most lasting legacy aren't bouquets of roses but a bouquet of innovation that served as mileposts for subsequent Internet affiliate marketing efforts. Sometimes, the influence was even seen in U.S. Patent applications. For example, patent 6,141,666 (applied for in January, 1997) was for a "method and system for customizing marketing services on networks communicating with hypertext tagging conventions." The secret sauce was, in part, "a dynamic token scheme to pass the identity of the referring network site from document to document to eventual purchase document accessed by the client through the hypertext tags."
This patent application contained more than a dozen screen shots from PC Flowers & Gifts' Web site. Various steps in the click-through process between affiliate sites and PC Flowers & Gifts site were depicted, along with an explanation of how the proposed advances would improve click-through functionality.
A description of the Order Page cut to the heart of the process -- one which many affiliate marketing sites still use today:
"The present invention employs a dynamic tokening scheme whereby a token, indicative of the identity of the referring network site, is passed between successive HTML documents so as to track the necessary customization requirements for all HTML documents presented to the client. This dynamic tokening scheme relies on software executables including tokening.cgi and track.cgi, and markup tags such as PORT#, URL, and IMAGEMAP."
The patent application then described the server-based communication system, which "provides a participating vendor with the ability to supply the system with HTML documents wherein the vendor has access into the system for control over the HTML documents supplied by the vendor. Moreover, the vendor has the ability to transfer HTML documents pertaining to product data, and receiving from the system encrypted files containing orders."
The patent literature then specified that the server-based communications system can be operated in any Internet or Intranet "environment where hypertext protocol and tagging conventions are utilized for communications between a client and server.
"The order is arrived at from any one of the product detail pages," the application added. "The site ID, product ID, and any product options are encoded in the hypertext access. The order page prompts the user for sender, recipient, personalization, and payment information. In addition, if any custom offerings are currently in place for this partner site, they are presented at this time."
Still blazing the trail
While PC Flowers & Gifts' technical innovativeness did not ensure its survival, some other companies from that formative era are still around, with affiliate marketing programs intact.
Survivors from those early days include Autoweb.com, which dates from 1995, as well as 1996 births including KBkids.com (now KBToys.com), and EPage.
Of these long-standing affiliate programs, Autoweb's is arguably the most straightforward. Affiliates place a graphic link to Autoweb on their site. Autoweb, in turn, pays affiliates $3 for each customer who lists a vehicle to sell or completes a purchase request for a new vehicle. Customers that complete a purchase request for a pre-owned vehicle earn the referral site $1.50.
For most of its history, KBKids/KB Toys' affiliate program has been similar to Amazon.com's Associates Program. Affiliates feature text and banner ad links to KBToys. Links contain a tracking code which can identify the source of the click-through -- such as affiliate Web sites. These sites, in turn, are paid between 2 to 10 percent commission on the sale.
Since 1996, EPage has offered a significantly different affiliate program -- essentially a classified ad service. The site hosts a rich variety of classified ads, which visitors to affiliate sites are directed to by means of banners, buttons or text links. EPage pays affiliate sites 10 percent of earnings from fees collected from referred users, plus a share of collective, pooled earnings.
Since Internet-based affiliate marketing has now been around for more than a decade, it stands to reason that advertisers and Web site publishers have lots of stories to tell. The next piece in this series will be devoted to these road tales from the front lines.
