This guest post was written by Steve Poland, a former TechCrunch writer working on his soon-to-be startup InSeconds which allows sites to easily customize each visitor’s experience, optimizing revenue for each visit.
Affiliate marketing is 15 years old this month – CyberErotica is said to have launched its first program in 1994. The adult industry has always been on top, but I’m trying to stretch. Despite 15 years of existence, which is basically never in the “Internet years”, the performance-based marketing method is still in its infancy. Sure, there are plenty of affiliate programs out there for many online promoters (and other sites seeking sales, leads, and visitors) and $2.1 billion was paid out last year from affiliate programs, but affiliate marketing still isn’t as easy as it should be for website publishers. / Blogging to implement their referrals and get compensation for them.
For those who don’t know, affiliate marketing works like this – a company with a product or service to sell pays a referral fee to publishers (marketing companies) that can drive sales, leads or visitors to them. The publisher bears the risk here – they may be spending their own money on advertising to promote the product/service, or they are linking to that company’s product/service in the content of their web pages (when they are linked to another company instead). The publisher signs up for an account in the affiliate program and is then given “trackable links” to use in their content, which track referrals to them. Most etailers have an affiliate marketing program – for example, Amazon.com’s Associates program pays a 4%-15% referral fee to you when a visitor to your site clicks a link on your site and makes a purchase on Amazon.com.
Twitter and Facebook turn everyone into an affiliate marketer
In recent times, it is not only websites/blogs that indicate sales, but individuals themselves, who are using real-time sites like Twitter and Facebook to influence their friends and followers by recommending products to buy, music to listen to, and movies to watch. These real-time discussions become important sources of referral sales and leads for websites – if someone on Twitter asked which digital camera they should buy, you’d bet Amazon.com would want anyone on the Internet to answer that user’s question for the link Camera for sale on Amazon.com (not Walmart.com or BestBuy.com). Amazon.com wants to make sure these influencers are compensated for referring people to buy from their website, which positively reinforces them to continue linking to Amazon.com product pages in the future.
Everyone who has access to the Internet today is a publisher. They sound. This has always been the case, but not as it is now with microblogging. Individuals were publishers on a smaller scale via email forwarding, email responses, instant messages, or the latest blog posts. Blogging has expanded one’s views (influence) to a global scale – no longer just impacting a few friends in a closed email, but they can influence online audiences. But the blogging was not real discussions. Instant messaging and chat rooms have always been real-time discussions—but primarily on an individual or small group basis. Twitter and Facebook status updates, also known as microblogging, have blended the realistic nature of instant messaging with the global reach and voice of blogging.
Amazon.com Affiliate Marketing Pioneers, Once Again
As an early pioneer in affiliate marketing for website/blog publishers (patented for all components of an online affiliate marketing program), it makes sense for Amazon.com to now be an early leader in affiliate marketing for individual publishers – those who simply tweet and comment on private Facebook updates with their friends. Last week, Amazon.com announced that it would start reimbursing individuals with referral fees for using Amazon.com links in their Twitter messages and in their Facebook status updates/comments. Although it will likely lead to more noise (and spam), I think we’ll see many more companies follow Amazon.com’s lead. I also think this has the potential to change the game, if some other pieces fall into place – more on this in a bit.
What has shocked me over the years is the number of links in web pages that cannot be tracked. Most of the links in the content are just regular links that lead to other web pages, which means they don’t have a tracking code that corresponds to them as the referring site – which means that when a sale is referred and occurs on a site that has an affiliate program in place, the site doesn’t know This affiliate program is for those who pay the referral fee (although they sincerely wish to, as it encourages association with them in the future through that reference publisher). In an ideal world, all the links on all web pages on the Internet that link to Amazon.com product pages would be trackable links that would earn those websites referral fees whenever their visitors click on and purchase products from Amazon.com. Ditto for all links that have affiliate programs in place.
Affiliate Marketing for Publishers Still Not Fast and Easy, Yet
I would like to go one extreme and estimate that 99.99% of all links on the web are there Not Trackable links. why? Quite honestly because it was a bit sore in the ass. If you’re a publisher and you’re writing a piece of content, you’ll need to step away from your writing, log into the affiliate program of the website you want to link to (such as Amazon.com Associates), and then create a trackable link to the webpage you want to link to – ensuring that when you Your visitors click on this link, you will earn a referral fee from Amazon.com when purchases occur. Not to mention that you have to sign up for all of these affiliate programs; Some of these programs are handled by third-party companies and are discontinued (which makes your links dead). Then there’s the money – if you don’t get very many visitors each month to your site, you may be making only a few dollars a month from affiliate programs, which then discourages you from taking the time to put trackable links in your content in the first place.
The lack of ease with which sites/blogs have had to use affiliate marketing over the years is the same for individuals now. Amazon.com said they endorse links that can be tracked by users in social media, but that’s still not easy enough. Sure, you can go to Amazon.com, log into your Associates account, and a button appears at the top of every product page that says “Share on Twitter,” which then creates a tweet with your trackable link in it, but that’s still one step too many. People are lazy. More than half of Twitter users use the Twitter app to do tweets. Until affiliate programs are integrated into social networking platforms (Twitter, Facebook, MySpace, forums) or apps used on these platforms (Tweetdeck, Seesmic, Tweetie, bit.ly), this affiliate marketing for individuals will not take off.
It is in the best interest of the platform (Twitter) to facilitate this as it will eventually allow its users to earn money. It is in the interest of users because it earns them money and enhances their use of the platform (Twitter). It is in the interest of the affiliate program (Amazon.com), as it positively promotes users to share links to their sites. (On the flip side, Twitter may not want to encourage this for fear of making the spam problem worse than it is.)
‘Facebook Credits’ could become a de facto virtual currency with Facebook’s integration of Amazon.com
But if you really think about it, Facebook should already be integrating affiliate partners into its platform first. Facebook has the most to gain through inclusion. You may have heard of the virtual currency system that Facebook was working on – Facebook Credits. It will allow users to purchase Facebook Credits with cash and then use them in third-party Facebook apps, such as leveling up your character in a game or buying a virtual rose for a friend. To get people using this system, Facebook will likely give some initial credits to each user, get them to see how easy it is to use it, and then get the user to pull out their credit card and reload it.
How about a constant recharge of Facebook balances every month to help motivate more in-app purchases/activities? That can happen. Even if users are earning $0.44 or $1.32 a month from their link-sharing habits, if that referral fee is automatically transferred to Facebook credits, Facebook can really start this in-app currency of their own (and if they run anything like Apple, they’ll get 30% of all money spent within the app). This will work for Amazon.com and other affiliate program participants, as long as the user knows that the 1,000 Facebook Credits they earned this month were from their sharing of Amazon.com links. Facebook will love it because these affiliate links will be a source of income for their users, encourage their users to spend more time on Facebook, and of course there is revenue associated with users who spend their credits. Finally, Facebook app developers will love it because they will also see a steady stream of revenue. Meanwhile, app developers and Facebook can stay away from Scamville-type offerings. With affiliate links, you only get paid if someone actually clicks and buys something. Good referrals are rewarded, while bad referrals get you nothing.
In addition, imagine advertising on Facebook or Twitter. I can see the headlines now, ‘Facebook Now’ employs ‘300 million people’ or ‘Facebook is letting 300 million people start making money just by sharing links’.
That’s it now, get ready for the effects
One effect of easily integrating affiliate programs into these real-time platforms (and/or client applications) is that your referral fees will be lower. Amazon.com currently pays 4%-15% on referral sales, but that’s because they know that only a small percentage of their sales now happen from referrals (due to lack of ease – and because of the laziness of sites linked to Amazon.com). But with the widespread use of trackable links, for example, if sales remained flat and 5% of all purchases were referrals previously and that number is now 25%, Amazon.com will not be able to pay 8% referral commissions (unless they go up). 5 times sales too), so Amazon.com will cut that down to 1.6% referral commissions (8%/5).
Yes, this traffic will increase the volume of spam noise for all of us through our use and searches on Twitter, Facebook and elsewhere. People you follow may experience spam, but their impact on you will be reduced (just like those people who send you a lot of pointless emails). Everyone has a personal brand and if you randomly email your audience with tons of links, they won’t listen to you as often.
But what I’m talking about isn’t the future — it’s here now, with the flagship Amazon.com. Those companies that do not embrace affiliate marketing for individual publishers, will lose. If someone tweets about their new iPod, that person will link to web pages that will earn them money.