But Where Did Affiliate Marketing Come From?
Affiliate marketing lives at the intersection of many of my interests: the economics of media, the world of grifters and scammers, lifehacking, consumption and its discontents. This is why I like envisioning the world as an affiliate marketer does. They provide a unique view on subjects which animate me.
Another topic that fascinates me is the history of the Internet, and in many ways the history of affiliate marketing is conterminous with the history of the Internet.
Today, I’d like to review that history, and further my analysis on the causes and implications of large media conglomerates launching affiliate marketing arms.
What I’ve Talked About When I’ve Talked About Affiliate Marketing
When I’ve talked about affiliate marketing, I have specifically meant affiliate marketing arms of major media conglomerates. I have made some attempts at distinguishing these from other branches of affiliate marketing, but I don’t know if I have distinguished them well enough. For example, I have mentioned that affiliate marketing is the same way that Instagram influencers make their bread: they will post a picture of them in pretty new makeup, include an affiliate tracking link, and thereby make money on the sponsorship.
To many, I think, this comes off as the advertisement that it is, and so I don’t see as much harm in it. I may be giving the fans of influencers more credit than deserved; it is quite possible that many believe this relationship organic and do not see this marketing as marketing, but as honest product recommendation. (One day I might come back to this point, but as someone divorced from the world of egirls and Instagram influencers, I consider myself an uninformed individual.)
What I find to be insidious, is the branch of affiliate marketers who pretend to be objective reviews of products. I would further separate this branch into two categories: boutique affiliate marketers focused on a single industry, and affiliate marketing arms of major conglomerates, or encyclopedic affiliate marketers, which hire a stable of writers to produce copy for a wide array of affiliated products. Some boutique affiliate marketers include Comparitech, Comfybeddy.com, and TekClue. If you follow a hobbyist blog of some sort, it is likely that they include affiliate marketing links, and would qualify as a boutique affiliate marketer. For example, Drawabox, a free course on constructional drawing, generates revenue through a combination of advertisements and affiliate marketing links to art supplies.
Historically, the boutique affiliate marketers have dominated the genre. The encyclopedic affiliate marketers are a relatively new affair. New York Magazine has provided shopping advice through The Strategist label for some time, but in 2018 it pivoted to online shopping with affiliate tracking links. Gizmodo Media—the predecessor of G/O Media—launched Kinja Deals, a weekly roundup of deals on the Internet with affiliate marketing links, in 2012 and expanded the brand into The Inventory in 2018. Slate began Picks, its affiliate marketing arm, in 2017.
I would like to briefly review the history of affiliate marketing, the early dominance of boutique marketers, and the current developments that lead to its more encyclopedic variety.
Affiliate Marketing Was Always Big
The three key years for affiliate marketing are 1989, 1994, and 2017. I shall chronicle these developments here. The following source, Zac Johnson’s A Brief History of Affiliate Marketing, provided me with most of the facts, though a few other sources as cited throughout.
1989
In 1989, PC Flowers, founded by one William J. Tobin, launched a marketing service on Prodigy. Prodigy predates me, predates the modern Internet, so I had to research it. This Atlantic article provided me the best introduction.
The Prodigy client allowed PC users to harness dial-up to connect to a proprietary IBM server which stored user-generated content. The Atlantic aptly describes it as “like if the Internet was owned by one company.” You could email friends, play games like Carmen San Diego, and shop. It included banner ads, like those which populate the Internet to this day.
I’m not young enough to remember Prodigy. I can vaguely remember AOL disks being a thing that existed, but know nothing beyond that. Sorry if this makes you feel old, but I’m a Zoomer.
The important point though is that the Internet was not, as Avenue Q proposed, made for porn. It was made for shopping, and PC Flowers recognized this fact before the Internet even existed. PC Flowers was not an affiliate marketing program, I must clarify. Instead, it was an online portal that connected Prodigy users with local florists that had signed up to be a vendor on Prodigy. It was more similar to Etsy or to third-party sellers who post their products to Amazon. But it helped cement the intricate link between the Internet and ecommerce which underpins affiliate marketing to this day. There’s a reason Zac Johnson, my main source and an affiliate marketer himself, cites Tobin as the godparent of affiliate marketing.
1994
CDNow invented affiliate marketing. CDNow was a store where users could buy CDs. They created an affiliate marketing program wherein bloggers who reviewed CDs could link to CDNow’s web portal and make money if their review prompted a sale. This is affiliate marketing as we know it: it follows this infographic perfectly. The blogs who participated in this program were necessarily boutique: they were only there to sell music. Furthermore, some of the more nefarious economic influences may not have been present at this time. Reviewers have always told people where and when they can buy a piece of media, even media they didn’t necessarily like. As such, CDNow only moved the needle on where the reviewer suggested that readers purchase their music. Certainly, a bad review would lead to fewer purchases on CDNow, and I could see this disincentivize criticism. A fun data project that someone should pursue—maybe I will—would be to scrape these websites that partnered with CDNow and identify if the average scores in their reviews changed after beginning their partnership with CDNow. Either way, the basic relationship between reviewer and product had not fundamentally altered.
Soon after, in 1996—which, we can round down to 1994 for the sake of ease—Amazon introduced its affiliate marketing program. At this point, Amazon was just a bookstore, not the industry-crushing behemoth it is today. They offered 5%-15% commissions on purchases made through affiliate tracking links.
Finally, also in 1996, LinkShare was born. LinkShare was an early attempt at creating a network that would allow for affiliate marketers to partner with multiple ecommerce websites at once. By partnering with LinkShare, blogs could refer readers onto any company within the network and receive a commission.
2017
I have already noted the importance of 2017: this is when the majority of encyclopedic affiliate marketers we know today launched. The Strategist, Picks, and The Inventory, all owned by major media conglomerates and all hoping to provide shopping tips for all arenas in life, arrived on the scene.
By now, of course, affiliate marketing was close to thirty years old. With such a long history, one must wonder why media conglomerates turned to affiliate marketing so late, why this development is so fresh. In fact, one could argue that the history of the encyclopedic affiliate marketer has more to do with the history of media conglomerates than it does the history of affiliate marketing online.
The Fall of Media
Online media has suffered greatly over the past decade due to decreased ad revenue and increased media consolidation under profit driven enterprises. While writing this piece, it was announced that Buzzfeed, which had recently acquired the publication, would lay off 47 writers from the Huffington Post newsroom. It is not a fun time to work in online media.
Pew Research provides a run down of the relevant data. I only wish to prove to you that media organizations need money, and that recent financial pressures would make them seek out alternative revenue sources, thus birthing the encyclopedic affiliate marketer in the last half decade.
Here are the facts, directly lifted from Pew.
Newspaper revenues declined dramatically between 2008 and 2018. Advertising revenue fell from $37.8 billion in 2008 to $14.3 billion in 2018, a 62% decline.
Newsroom employment at U.S. newspapers dropped by nearly half (47%) between 2008 and 2018, from about 71,000 workers to 38,000. Newspapers drove a broader decline in overall U.S. newsroom employment during that span.
These trends are present in all digital media. Another article by Pew shows that while digital advertising revenue has grown recently, 52% of that revenue accrues to Facebook and Google, leaving very little for media.
So, if you are G/O Media, Slate Media, or Vox Media, three organizations that have launched affiliate marketing programs since 2017, you face a sclerotic industry where revenue is sparse, and layoffs and bankruptcy are common.
The good faith interpretation of this trend is that these companies have found “one simple trick to save journalism.” By providing a service that traditional media has always provided, the review of products, and adding affiliate tracking links, news itself might be saved.
As a contrarian, and anti-consumerist, and Marxist who feels uncomfortable with the 4th estate saving itself through increased reliance on revenue from monopolistic and malfeasant industries, I want to push back on this.
Two Types of Marketers, Two Conclusions
I have introduced two types of affiliate marketers, one as old as the Internet and one that’s relatively new. Let’s talk about them.
My Final Take on Boutique Affiliate Marketers
On this matter, I feel a complex mood.
For boutique affiliate marketers, my reception of them depends largely on what the general gist of the blog is. If the blog is like Drawabox, which is really a drawing tutorial service that happens to employ affiliate marketing links to augment revenue, then I am less skeptical. The point of the site isn’t to get me to buy things, and so I recognize these advertisements as being advertisements. Additionally, for a small site like Drawabox, I feel that the recommendations are actually rather genuine. One of the affiliate links included is a book of World of Warcraft concept art. From having followed Drawabox, I know that World of Warcraft’s art likely had a palpable impact on his art style, and that its recommendation is genuine.
However, Comfybeddy and TekClue are utterly skeevy. Boutique affiliate marketers like Comfybeddy and TekClue pose as objective review sites. The point of these sites is to recommend and sell products in a specific domain. While these are sometimes linked to a specific hobby, like consumer tech in TekClue’s case, these articles are not designed to support a hobby so much as recommend products to someone pursuing that hobby. I think this is a key distinction. If someone pretends to objectively recommend products for a hobby, but they also happen to use a performance-based marketing strategy, then they’ve a conflict of interest.
Then let us imagine a website whose use of affiliate tracking links I would find anodyne. Let’s say we had BigFish.Com, a website about fishing. If BigFish.Com regularly included articles explaining how to improve one’s technique, the best fishing spots in the Great Lakes, interviews with famous fishermen, but then on occasion included articles on their favored fly fishing lures with affiliate tracking links, I think I would be fine with its existence. The value that BigFish.Com would add to its community exists outside of mere product recommendation. While I would still be skeptical of the lures they recommended, I would see this as an evil I could stomach in order to get quality fishing tips to the masses. If BigFish.Com instead only recommended fishing poles, and included affiliate marketing links with them, then the only possible value they could add to the community would be through product recommendation, but the product recommendation in this case is tainted and not to be trusted. So, in this case, we have no true value added. BigFish.Com would not provide a service, but a disservice.
Drawabox exemplifies this criterion. Drawabox has provided me, and millions of others, with drawing resources that teach how to draw realistically from reference images. It’s an immense value added to the art world. Many beginner artists have receive invaluable training from it. That it also includes affiliate marketing links is something I can accept. Frankly, I will likely buy my next sketchbook through one of their affiliate marketing links, because I believe in supporting Drawabox, and am fine with potentially buying a product whose recommendation was tainted by advertising practices in order to support Drawabox.
This, again, will never happen for Comfybeddy because all they do is sell bedding. I don’t have any investment in supporting Comfybeddy or in wanting them to succeed. I want them to fail.
I suppose one could summarize this heuristic as follows: is the affiliate marketing incidental to the nature of the blog, or is it the entire show? If one described Drawabox as an affiliate marketer, one would be mistaken: Drawabox is a drawing instruction site that includes affiliate marketing links to supplement income. This is not the case with Comfybeddy.
Certainly, as an anti-consumerist and anti-capitalist, I feel conflicted about the fact that Amazon has created an affiliate marketing program so powerful that a multitude of small projects, like Drawabox, need to refer readers to the Seattle superstore in order to keep the lights on. But I am not critical of working class creatives, like Drawabox. The difference between this and Leftist YouTubers monetizing their content on YouTube, thus giving ad revenue to both themselves and to Google, seems minimal.
My Final Take on Encyclopedic Affiliate Marketers
Yet, surely something similar happens with affiliate marketers attached to a large media company, no? In many ways, Picks is incidental to Slate. Buzzfeed includes affiliate links in its quizzes, but Buzzfeed News is a multiple Pulitzer finalist whose investigative journalism arm broke important stories concerning Vladimir Putin’s poisoning of political opponents. Can’t I accept it, under my own rules, the same way that I do Drawabox?
I can certainly see the argument. I am invested in Slate succeeding as a website because I like its journalism, which has minted some opinion writers, provocateurs and trolls like Dave Weigel, Jamelle Bouie, and Matt Yglesias whose contributions to the discourse I appreciate (even if, in Yglesias’ case, I often firmly disagree with their takes). My favorite Anne Helen Peterson essay came from her tenure at Buzzfeed. I read Vox daily.
Yet, enterprises of different scales often have different principles animating them, and as such, I don’t actually believe that my heuristic of the merely incidental applies to large and consolidated affiliate marketers. A simple rule can apply in simple cases, like with Drawabox, an important labor-of-love maintained by a single, generous drawing instructor.
Simple rules cannot apply for the complex world of modern media. Here are my critiques of encyclopedic affiliate marketing, in no particular order:
First, and most importantly, is the fact that dollars that go to media conglomerates go into the pockets of shareholders, not individual journalists. Jeff Bezos owns the Washington Post, and were they to release an affiliate marketing program, my money would not solely benefit its investigative journalism: it would benefit one of the richest men in human history. Similarly with G/O Media, which is owned by Great Hill Partners. And while Buzzfeed and Vox Media are both independent media conglomerates not owned by the wealthiest names in capital, they still have shareholders. Smaller affiliate marketers lack this nuance.
Second, I’m not certain that profit-seeking media companies truly use the revenue received from affiliate marketing to fund their journalism. In the film industry, an argument I have heard before is that successful big budget productions like 21st Century Fox’s “The Simpsons” allow them to take the risk on smaller productions like Fox' Searchlight’s 12 Years a Slave. Yet, I am skeptical of this. Having studied economics at university, I know that product differentiation exists within markets to capture different consumers. The prestige pictures of Fox Searchlight are designed to profit off of people uninterested in more mainstream fair. Its movies still exist to make money. They still make their budget back. The fact that Searchlight Pictures spends so much money on For Your Consideration campaigns is because it knows that winning Best Picture at the Oscars will generate enough ticket sales to make campaigning for the Oscars worth an advertising budget. Really, if something has an advertising budget, it’s because its owners expect it to make money. Blockbusters do not finance indies: the indies finance the indies, and the indies would not exist if they could not turn a profit.
By analogy: I don’t think that The Inventory subsidizes the hard hitting journalism of G/O Media so much as makes a new platform for Great Hill Partners to make money for its shareholders. It allows them to capture an audience uninterested in The Root’s Black culture, uninterested in Jezebel’s feminism, uninterested in Kotaku’s video games. It seeks to capture those interested in deals, not those interested in journalism. And I can promise you that if G/O Media identifies that its revenue stream from shopaholics outweighs its revenue stream from feminists, it will reduce the amount of capital it invests in Jezebel and increase its investment in The Inventory. I am worried that, in the upcoming years, if advertising revenue shrinks while affiliate marketing revenue continues to expand, many of these media conglomerates will pivot away from journalism entirely and focus on marketing. Then, it won’t be affiliate links subsidizing journalism: it will be the nest egg these companies had once accrued through journalism now funding further ventures into marketing.
Third, is that they provide the cover of objectivity and journalism to something with no claim thereof. The Strategist, for example, is a long standing publication within New York Magazine that did not traditionally use affiliate tracking links. Someone unaware of these new arrangements may not understand how performance-based marketing would make The Strategist beholden to corporations rather than to their audience. G/O Media does little to distinguish The Inventory from its other brands, like Jezebel and Gizmodo, and so someone wandering through its articles may find themselves reading advertisements, not journalism. Finally, they write articles that mimic the language of objective reviews. They borrow the style of journalism in order to do something antithetical to journalism. I do not wish to live in a world where advertisements pretend to be facts.
Fourth, affiliate marketing in itself is not a service, but a disservice. What boutique affiliate marketers like Comfybeddy and their more encyclopedic brothers do is provide you the “service” of scouting out things to buy. Most of the time, your life will not appreciably benefit from purchasing these things, and time spent trying to optimize low-impact purchases like pasta sauce is time effectively wasted. I want to dispose of this philosophy wholesale. Dedicating entire sections of major publications to this mode of thought does not do the culture good.
Therefore, I don’t see any value in these trends. It is, at best, a hyper-consumerist band-aid for the moribund media industry, and at worst a negative for the future of journalism.