Cristina's Blog

In November 1994, just after the world wide web was born, a company called CDNOW came up with an online way of selling called “BuyWeb” – a click through purchasing set-up that functioned independently from the storefront.

CDNOW’s online system is the pioneer form of profitable affiliate marketing. After some time, many online businesses followed its steps to success (Amazon.com is an example). Affiliate Marketing has been an important tradition in the family of marketing strategies. The system has evolved into a consistent method of advertising and selling. Hence, it has become a staple amongst the large companies due to its effectiveness and economical characteristic. Moreover there is a little to no risk involved for both the merchant and affiliate.

The most common scheme used in affiliate marketing is CPC or Cost-Per-Click. In this system, the affiliate reels in commission for each redirected reader to the merchant’s website. Affiliates post ads or link on their website that readers click, and they are sent automatically to merchant’s page. CPC is rarely used by merchants as they are a number of fraudsters who take advantage of the scheme. These are the dirty tactics used in CPC: false advertisement that is similar to a bait, ad-ware that can infiltrate the visitor’s system, forced click technique, “keyword stuffing”, tracking cookies and many more. Cost-per-click system has been losing its spark because of the frauds.

Merchants would rather utilize Cost-Per Action / CPA or Cost-Per Sale / CPS. These schemes are similar because affiliates receive commission or revenue share when a website reader/visitor subscribes or avails of the merchant’s products being referred by the affiliate’s site.

For example, I am an affiliate, and you will be my merchant. In my site, I will promote your products or services by putting up some ad or link on my blog about your company. Visitors who are interested, would click the ad or link on my site, be redirected to your website, and avail of your product or service. That would earn me a commission or a share in you revenue.

These 2 methods present little to no risk for both the merchant and the affiliate, and are therefore preferred. However, Google’s new Latent Semantic Indexing could mean that CPS will become risk free as well (Latent Semantic Indexing will automatically fish out websites with nonsensical content, or that have keyword stuffing or are advertising sites that are not comparison or shopping sites.)

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