A Brief History of Affiliate Marketing – (1989-2015)
The history of affiliate marketing is a fun and exciting one — especially if you were around in the mid-90s to experience it first hand. I first started making money online in 1995 and it’s always funny to hear people say they are veterans in online marketing when they just only have a few years under their belt. The real history of affiliate marketing goes all the way back to 1994 with the birth of the CDNow.com affiliate program… which I was proudly an affiliate of!
In this post we are going to take a trip back in time and look at how affiliate marketing has grown over the years — both from my own perspective and through the documented information and data in the infographic below.
The History of Affiliate Marketing: Broken Down By Year
1989 – Prodigy Helps Kickstart Online Marketing
While the first ‘real’ affiliate program didn’t come out until 1994, it was in 1989 that William J. Tobin, founder of PC Flowers and Gifts took his marketing efforts to the internet and used Prodigy’s network to start marketing his business. So does William J Tobin deserve the title of being the first internet marketer?
If this looks familiar… then you my friend, are old school! (source)
On a side note, I remember using Prodigy to connect with one of my previous school teachers from elementary school. Should any of you remember the Prodigy interface and design, it was quite colorful and odd — a memory I will never forget!
1994 – CDNow Launches their BuyWeb Program
CDNow.com was an online store for buying music and movies. No… not streaming content, but real physical CDs and Tapes (or DVDs) that would be shipped out and used in a video player. The concept of CDNow’s BuyWeb program was that sites could join their program, link to their content and earn a commission from any purchases made from their site. Such commissions could be paid out via check or as compensation to purchase products through their site.
A look at the old and very simple CDNow.com site. (source)
While CDNow is credited as being the first affiliate program, Brad Waller of ePage says they were also one of the first.
1995 – I Start My Journey into the World of Online Marketing
I always knew I wanted to be an entrepreneur or be in business for myself, but really wasn’t sure how yet. I was a Freshman / Junior in high school when the internet started to gain traction and I was immediately addicted.
Here’s a picture from one of my many desk setups over the years in the corner room of my parents house. This is where it all started.
Before finding success with affiliate marketing, I was creating a few fun hobby sites of my own. At the same time I was also designing banners (468×60) for my sites. I went into the AOL Web Diner chat room (where other site owners would meet) and they started asking for banners to be made. I made them for $1 each and the person would hopefully send me a dollar in the mail. Don’t forget, this years before anything like Paypal was around.
Other ventures included AllAdvantage banner program, pushing web hosting in AOL chat rooms, getting clicks for Pacific Coast pillow company and building websites for other companies… then it started to get pretty serious when I fell into the world of affiliate marketing.
1996 – Amazon Launches their Associates Program
This is the move that changed everything… Without the support and growth of Amazon.com, affiliate marketing may very well not be the massive industry it is today.
Back when Amazon first launched their associates program (which is pretty much the same as an affiliate program), they only sold Books, Movies and Music. Back then Amazon also paid around 5-15% commission on referred sales to their site.
Amazon.com was also one of my first and most successful methods for making money online before getting active with CPA marketing and realizing I could make more money from getting people to sign up to free offers or complete specific tasks, versus receiving only 5-15% and needing them to pull out their credit card.
Amazon.com: $38.72, Jul 30, 1998
While all of this is going, once websites start to realize they can link to Amazon and make money in the process, Amazon quickly finds themselves as the leader in buying anything online and continues to add new products to their store.
At the same time, LinkShare affiliate network is launched — further establishing the concept of affiliate marketing.
1998 – Commission Junction Launches
One of the most successful affiliates networks of all time, Commission Junction is launched.
A copy of the letter that was sent with checks and actually signed!
The launch of CJ.com was huge not only for the industry but also for myself. At this point in my online journey I was already actively pushing affiliate offers on a CPA basis (free stuff, sweepstakes, credit cards etc) and had my own network of lead generation sites as well. I also went onto have three of my own affiliate programs within the Commission Junction network and paid out mid-six figures to my affiliates during this time. (Insanely enough… full registration and demographic data signups were costing me less than .10 per lead!)
In 2000 I took a week off of school and flew across the country with my Dad to attend CJU, Commission Junctions first affiliate marketing based conference for their affiliates, merchants and brand partners. Needless to say, I was the youngest one there and it made a huge impact on my connections and understand of how to run a business online.
It was also this same conference that I met two good friends of mine, Declan Dunn and Brady Whittingham — both of which are still active in online marketing today.
Commission Junction went on to be acquired by ValueClick for $58 million and is still one of the largest and most successful ad networks in the world today.
This was also the first year that I forked up the $70 to buy a domain name through Network Solutions. Yes, domain names used to cost $35 per year, and came with a two-year commitment.
Network Solutions was the Domain Monopoly Back in the 90s.
Along with CJ, ClickBank, a digital based affiliate network was also born this same year. To date, ClickBank has paid out over $2 billion to their affiliates.
2000 – Enter the FTC and Regulations
If business and money is being made… the rest of the world and the FTC will surely find out about it.
While the internet can still be seen as the Wild West, imagine what it was like 15 years ago.
The FTC attempts to start making regulations for the internet and it all starts off with simple disclosure statements… but there is plenty more to come.
2003 – Affiliate Summit is Launched
The first conference I ever spoke out at was called Affiliate Force — and what made it more exciting than anything else, was that it was based on a cruise and sailed out of Miami, Florida. It was created and managed by Herby Olschewski. The event took place for a couple years, but phased out due to poor management and focus.
Marketing Veterans of Affiliate Force Cruise
In 2003, Shawn Collins and Missy Ward took the concept of creating a highly focused affiliate marketing conference into their own hands and launched “Affiliate Summit”. The concept was similar to Affiliate Force, but the direction would be the complete opposite.
Myself, Missy and Shawn while at Affiliate Summit 2007
The first Affiliate Summit (which I also attended) was in New York City and had only 200 attendees. With a tight network of friends and business already brought together from the cruise networking events of Affiliate Force, Affiliate Summit 2003 was mainly land-based but did include a short cruise out of New York City to Nova Scotia, Canada.
Today Affiliate Summit is held twice per year in New York City and Las Vegas, while also having over 5,000 attendees as each event. I must have been to and spoken at around 15 of these events so far.
2005 – LinkShare Gets Acquired by Rakuten
It took less than 10 years for LinkShare to created then acquired for $425 million — which was the largest affiliate acquisition at this time. This deal also made the CJ acquisition for $58 million look like quite a steal!
With more focus on affiliate marketing and money pouring into the industry from every outlet possible, the idea of compensation based marketing was more legitimate than ever before.
2006 – One Site, One Year = $1 Million
While not highlighted in the infographic below, the years of 2006 and 2007 were quite exciting in that MySpace and Facebook were starting to change the landscape of the internet and how we would connect with each other. With the ability to target a wide range of users on one web site platform, this opened up a whole new world of opportunity for online brands and especially affiliate marketers.
For myself, I went on to create a successful social media resource site that went on to generate over a million dollars in profit and over 330 million site visitors — all through viral marketing. The emphasis here is that nearly all traffic to the site was free and as more people continued to use the site, it kept growing in size. You can learn more about that site here.
Eventually, I had 16 dedicated Dell servers powering the site, as it was quickly scaling in size and reaching over 100,000 unique visitors per day.
To make this story even more exciting, the site was completely HTML with zero programming and made nearly all of it’s revenue off the concept of affiliate marketing.
2007 – The Launch of ZacJohnson.com
With roughly 12 years under my belt in the world of affiliate marketing, I decided to launch my own blog at ZacJohnson.com to establish my own brand and voice in the industry.
In short, it was simply the best business decision I ever made. Through the content, resources and tutorials on the site, I’ve helped my readers earn millions of dollars online while also opening a whole new world of opportunities for myself and my business — such as walking the red carpet in Hollywood, speaking at events around the world, launching my own podcast and hearing from thousands of my readers on a daily basis.
2008 – More Regulation with the Affiliate Nexus Tax
In 2008, more regulation crept its way into the world of online marketing with the Nexus Tax. New York passed a legislation that would require individuals and organizations who have specified relationship with Amazon.com to collect sales tax from their vendors. Sounds easy enough… but the end result was Amazon.com closing their affiliate program to any and all New York residents.
By 2013, the Nexus act would be adopted by 13 different states and Amazon would continue to kick out affiliates from each respective state. To hep protect performance marketers against any new legislation, the Performance Marketing Association was created — which would act as a voice for the online marketing and affiliate community.
2009 – Further Regulations from the FTC
As mentioned earlier, as word gets around about any new type of business or money being made… the government will always want their cut and put in as many regulations as possible.
This latest regulation would be on disclosure and requiring bloggers, celebrities, and affiliate marketers to include a disclosure statement when using testimonials or for any compensation agreements that might be in place on any topic, service or brand they are referencing to. Today it is commonplace for nearly all sites to have a disclosure statement, privacy policy and terms and conditions located on their sites.
2012 – A Conference for Affiliate Managers
As the world of affiliate marketing continues to grow, so do the jobs and opportunities for businesses catering to the needs of big name brands and affiliate marketers. Affiliate Management Days was started in 2012 by Geno Prussakov with the idea to be solely focused on affiliate management training. The first event takes place in San Francisco and still takes place today.
With an active eye on the Nexus law and the FTC trying to regulate the internet and affiliate marketing, in April of 2012, a U.S. District Judge from Colorado ruled that the Affiliate Nexus Tax was unconstitutional.
2013 – The Evolution of the Affiliate Landscape
The United States congress introduces the Marketplace Fairness Act, a law in place to require online vendors to collect sales taxes, but only after the state themselves simply their sales tax laws. Over the next several years, the FTC and government would continue to come up with new ways to try and tax online business and marketing efforts, while also having more control over what, where and how affiliate marketing takes place.
In a surprising move, Google decides to shut down their Google Affiliate Network — which was their attempt at breaking into the world of affiliate marketing (previously Doubleclick Performics). Today Google still pays out and earns billions of dollars through their Google Adsense affiliate program, which is also one of the easiest ways for site owners to first earn money online.
2014 and on…
It’s safe to say this summarize history of affiliate marketing has really only scratched the surface. The most important thing to know is that affiliate marketing is alive and well and you are simply going to get out of it, what you put in.
Over the past 20 years the industry has changed dramatically, as I have also had to.
There has never been a better opportunity to make money online or start a business of your own and affiliate marketing is simply the best way to get started.
The History of Affiliate Marketing Infographic
