The concept of affiliate marketing on the Internet was conceived of, put into practice and patented by William J. Tobin, the founder of PC Flowers & Gifts. Launched on the Prodigy Network in 1989, PC Flowers & Gifts remained on the service until 1996. By 1993, PC Flowers & Gifts generated sales in excess of $6 million per year on the Prodigy service. In 1998, PC Flowers and Gifts developed the business model of paying a commission on sales to the Prodigy Network.[8][9]
Understanding Mobiles: Understanding mobile devices is a significant aspect of digital marketing because smartphones and tablets are now responsible for 64% of the time US consumers are online (Whiteside, 2016).[42] Apps provide a big opportunity as well as challenge for the marketers because firstly the app needs to be downloaded and secondly the person needs to actually use it. This may be difficult as ‘half the time spent on smartphone apps occurs on the individuals single most used app, and almost 85% of their time on the top four rated apps’ (Whiteside, 2016).[42] Mobile advertising can assist in achieving a variety of commercial objectives and it is effective due to taking over the entire screen, and voice or status is likely to be considered highly; although the message must not be seen or thought of as intrusive (Whiteside, 2016).[42] Disadvantages of digital media used on mobile devices also include limited creative capabilities, and reach. Although there are many positive aspects including the users entitlement to select product information, digital media creating a flexible message platform and there is potential for direct selling (Belch & Belch, 2012).[44]
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Because 2Checkout exclusively sells software and digital products, it is best suited for established influencers whose target audience is interested in buying products in this niche. But while you won’t find any physical products for sale, 2Checkout is probably the market leader in selling software of every type, including very specific use case items (like software that can convert Microsoft Word documents to PDF, for instance).
Of course, this is a generalization, and there are some programs that have made themselves exceptions to the rule. For example, I’ve seen many affiliate programs that offer low commission rates on products that are worth very little. I’ve also seen a few programs with items priced into the hundreds or thousands of dollars that offer commission rates of 20-30%.
Once you acquire a new customer through one of your affiliate partners, they've entered your ecosystem and you can direct market to that customer without going through your affiliates. Remember to consider that long term value of your customers into the equation when deciding your commission structure. For many businesses, I wouldn't care if I broke-even on affiliate sales – so long as I had a way to maximize the long term value of each new customer they brought me. As you probably know from experience, breaking even on acquiring customers to your sales funnel is nothing to sneeze at in e-commerce. There are many circumstances where I'd literally do that unlimited times if given the option!
Affiliate marketing has grown quickly since its inception. The e-commerce website, viewed as a marketing toy in the early days of the Internet, became an integrated part of the overall business plan and in some cases grew to a bigger business than the existing offline business. According to one report, the total sales amount generated through affiliate networks in 2006 was £2.16 billion in the United Kingdom alone. The estimates were £1.35 billion in sales in 2005.[19] MarketingSherpa's research team estimated that, in 2006, affiliates worldwide earned US$6.5 billion in bounty and commissions from a variety of sources in retail, personal finance, gaming and gambling, travel, telecom, education, publishing, and forms of lead generation other than contextual advertising programs.[20]
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