Background of Performance or Affiliate Marketing – 2

Developing payment methods for online advertising

Traditional methods of charging for advertising assumed a scarcity value – there are only so many television channels and timeslots, only so many editions of newspapers and magazines with a standard size of page and only slightly varying number of pages.

There is no scarcity of advertising space on the internet – anyone can put a site online and generate thousands of pages very quickly. One page per article increases the advertising space – and splitting an article over several pages multiplies the advertising space accordingly. This has also brought about content farms like about.com, ehow.com and MFA (made-for-adsense) sites. There are entire businesses built on selling advertising to their membership / email databases.

So, new payment methods are needed – and they often clash with old-style business models.

Classic Advertising Lament: 50% of advertising is wasted – if only we knew which 50%

The New Promise/Myth: The main advantage of the internet is that it is ultimately measurable.

Common Metrics – pay per impression, pay per click, pay per lead, % of sale

All serve different purposes, all have benefits and drawbacks to different parties. All are open to manipulation and fraud.

So…

Performance means that ALL parties have to perform within one of the metrics available – and they need to trust each other.

Performance or affiliate marketing is one of the reasons the internet is full of rubbish.

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