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Affiliate Marketing Is A Scam: DEBUNKED
Affiliate Marketing is approached by many folks with caution… Why? Did it just come out of nowhere???? This must be a scam, right? I too was one of those skeptics believing that affiliate marketing was a pyramid scheme, Ponzi scheme, etc. SPOILER ALERT: it’s not a scam or a scheme and it is DEFINITELY NOT new!
The Term “AFFILIATE MARKETING” is a new label on an old strategy. Marketing has been around for centuries and evolved over time. The overall core concepts remain similar, value-based, serve your audience, build trust, and know the products you sell, what has changed in the last 10-15 years, is the ability to earn passive income. This blog post will show how present-day affiliate marketing campaigns are simply “digital repurposing” of age-old, successful marketing strategies and how technological growth has made it possible to earn an income without active selling.
Having access to a home computer, high-speed internet, social media, smartphones, and streaming services paved the way for affiliate marketing today.
Video Killed The Radio Star
When FM radio come on the scene, radio was life until “video killed the radio star!” Let's go back to the Gen X Childhood… Remember when we were the remote? Or running after hearing your name called, just to be instructed to adjust or hold the antenna? Television at that time was much different than today. I vividly remember having 3 channels and being asked to turn the nob on the very small, black & white TV that sat on top of the extra large stereo console. And, if given the opportunity, I'd watch it until the rainbow stripes appeared.
When television took over, so did TV commercial ads and the budget shifted. FM radio wasn't the dominant source of advertising. Television commercials increased and a decline was noted in the door-to-door salesman disrupting your days. Then cable and satellite replaced the antenna, and commercial advertising boomed. Advertisers LOVED TV Ads; they still pay millions of dollars for 30 seconds of commercial time during the Super Bowl. But what happened when smart TVs become household items? We started using streaming services like Netflix, bye-bye Blockbuster. But then, Hulu offered affordable ad-free plans; bye-bye tv commercials. Today we have all sorts of ad-free streaming services for viewing and listening, with little to no advertising. Do you think major brands stopped advertising? The answer is no, they now have affiliate programs and influencers.
High-speed internet changed all of our lives. Encyclopedia anyone?? My kids have no idea what that is. Today, we “google it” or search YouTube. We receive fewer sales ads in the mail too, Why? Email marketing!
Smart Phones & Social Media
Successful affiliate marketers today, also known as influencers use social media (Facebook, Instagram, TikTok, etc) to deliver value-based promotion to people worldwide. The Influencer's how-to video is the new “door-to-door encyclopedias sales guy.” Influencers are often affiliates, they're growing in popularity across platforms. This is known as social selling. Commercial advertising through social media by real people. Influencers utilize their free social sites to bring awareness to products or promotions that have value to their audience or news feed. Remember, ad-free streaming services replaced cable tv commercials, and brands paid millions of dollars for seconds, now they pay the affiliate or influencer to promote their products.
The Shift
All successful affiliate marketers teach the importance of building your brand through trust along with building an email list. To do this, you offer something of value (how-to guides, checklist, training, etc) for free in exchange for an email address, commonly this occurs on a blog site. How do they find the blog site you ask? Social Media. The Influencer/Affiliate uses the free social media to drive traffic (consumers) to the free offer. The consumer enters their email, the free item appears in their inbox. That email is often followed by a series of emails, previously written, and scheduled overtime using automation software. These emails include further value-based promotions or offer similar products; this process is called upselling and cross-selling. The consumer then purchases items presented in the emails and the affiliate makes a commission, the art of passive income.
This is a “severe-your-audience-first” concept. You learn their “pain-point” and promote products that serve as a solution to their expressed needs. It is what’s known as VALUE-BASED-SELLING and nearly 90% of high-growth companies prefer this selling approach because it works and has worked for hundreds of years.
Before televisions, brands relied on door-to-door sales to make a personal connection, showing off their products through demonstrations. This value-based promotion was carried out through direct-selling (direct-selling has been around since the 1700’s peddler) and as previously explained, has since evolved into social selling. To further expose the “affiliate marketing is a scam” myth, I’ve outlined how the strategies have evolved in the last 100 years.
Key Moments
- 1920 – door-to-door sales
- 1925 – 1st Active and Associate Memberships
- 1930 – F.D. Roosevelt’s New Deal Act resulted in Salesman being Independent Contractors and Earning commissions
- 1931 – Green River, Wy bans door-to-door sales
- Late 1930’s door-to-door sales drop
- 1940 – Norman Squires’ “Party Plan Method”: ladies invite 10-12 friends for coffee and entertain them with product demonstrations.
- 1941 – The US enters WWII > Women enter the workforce many via direct-selling
- 1950 – Direct Selling expanded with the entrepreneurial spirit, giving birth to several industry-leading giants
- 1951 – Tupperware pulls products off the shelf and distributes them solely through home sales due to party success.
Top 30 list of companies from the 1920s-1980’s
- Electrolux
- Fuller Brush
- Real Silk
- These companies were owned by Frank Stanley Beveridge, founder of
- Stanley Home Products
- Mary Kay
- Mary Crowley
- Avon
- The Southwestern Company
- WearEver Aluminum
- Avon
- “Royal” fashions of Queens-Way
- Jafra
- Home Interiors (Founded by Stanley’s Mary Crowley)
- Amway
- Then the 1980’s Explosion and the internet
- The Pampered Chef
- Herbalife
- Arbonne
- Life Force Int’s
- Vorwerk USA
- Kitchen Fair
- Sunrider
- Take Shape for America
- Nu Skin
- Oxyfresh
- Cookie Lee
- Innovage
- Melaleuca
- Premier Designs
- Fifth Avenue Collection
- Unicity
Tupperware and the Party Plan Method
Tupperware parties were more than an excuse for ladies to ditch their husbands and kids and be social, it was the value-based marketing strategy of success! This type of Affiliate marketing and value-based selling provided a solution(s) to moms who wanted income and to stay home, in addition to value to the attendees. See below…
Step 1: Tupperware Rep (Sales Rep/Affiliate) would ask their friend to host a party, in exchange for discounts/freebies to be determined by the total sales of the party.
Step 2. The Party. The Rep/Affiliate would mingle with the guest, learn their interests/wants/needs, and promote/demonstrate Tupperware solutions. In addition, get more leads.
Step 3. The Emotion. The parties were social, informative, fun, and exciting. Attendees competed in games to win prizes and discovered products to simplify their lives. They included food, drinks, storytelling, laughter, and solutions.
Step 4. The Rep/Affiliate earns commissions and bonuses on parties.
The Internet Changes Marketing
Digital Affiliate Marketing began with William J. Tobin and PC Flowers & Gifts after the launch of the World Wide Web. Mr. Tobin launched the first eCommerce site in 1989, soon after he launched “Prodigy Network” and by 1993 was generating $6 million annually. The Prodigy Network is strikingly similar to advertisers running Google Ads for business and earning commission for sales aka the Modern Millionaires Model. By 1995, Tobin’s network had 2,500 digital affiliates, the concept was successful, he applied for a patent in 1996 and 4 years later, in 2000 the patent was issued.
Next, recall CDNow’s BuyWeb program in 1994. This allowed music sites to review albums and include a purchase link. That link took the readers from the review to the album on CDNow’s site for easy purchase. Additionally in 1994, Lou Montulli, a computer programmer created the tracking cookie. What’s a cookie you ask? Something we all now accept or deny… A cookie is a small data file stored on your computer when you visit a website, initially a way to identify you and store your login information. It’s like your digital fingerprint. But it also provided a way to track and store the web users’ behaviors and interests but in terms of affiliate marketing, the cookie provided the means to track the performance of affiliate campaigns. Tracking performance via cookies is the most common and preferred method used today.
In 1996, Jeff Bezos launches Amazon Associates Program. That same year, LinkShare and Befree affiliate programs launched. Although falsely believed to be the first affiliate marketing model by many Amazon Associates Program was the first to capture global interest. It is further responsible for the framework for today’s affiliate networks.
1997 gave way to affiliate directories, the 1st being Refer-it, which provided a search engine for affiliate programs including program overviews and ratings.
In 1998, Affiliate Networks were established to offer payment solutions and facilitate exchange between merchants and affiliates. The first was Commission Junction (known now as CJ.com) and Clickbank Network.
Legitimatized
In 2000, the US Federal Trade Commission published guidelines for affiliate marketing, requiring affiliates to disclose their relationship and earning potential, failing to do so would result in penalties. This legislation prevented deceptive marketing and moreover influenced the legitimacy of affiliate marketing online. Since then, affiliate marketing has grown substantially, now estimated at 12 billion dollars.
Social Selling: the new age party plan method
I’ve previously explained how social media shifted from direct selling to social selling. It began around 2010 and hasn’t stopped growing since. Most people worldwide use social media daily. In 2018, it was estimated that most people spend 24 hours a week online, with the majority on social media. Advertisers took notice and by 2020 more than 80% of major brands spent at least 33% of their advertising budget on affiliate marketing with plans to increase it to 71% by 2025.
Please let me have your undivided attention for a recap… Affiliate Marketing is growing in popularity and isn’t stopping anytime soon. Affiliate Incomes are regulated by the FTC, you cannot claim false earnings without penalty. As of 2020, affiliate marketing was estimated to be a $12 billion industry with 81% of major brands spending only 33% of their advertising budget (the same budget used to pay millions of dollars for 30-second commercials) on their affiliate marketing programs and they planned to increase the 33% to 71% by 2025. That’s a 38% increase of $12 Billion dollars! That’s where they are getting their money!
The Shut Down
The unprecedented year of 2020, COVID shut down the world and catapulted affiliate programs. During the shutdown, people started working from home, eLearning and telehealth were forced upon us and new niches started appearing in the affiliate marketing world. Today, many of those same people who were forced to work from home, are being forced back to the office. As a result, we have seen another spike in people wanting the freedom to work from anywhere, like women entering the workforce after WWII. Since the shutdown, there’s been a spiked interest in online entrepreneurship. Affiliate Marketing, is the driving force of successful change. Mom's like me, are home with their families again. Kids need their mom and increasing inflation is making more than one income a necessity. Another undisputed fact is history tends to repeat itself. After reviewing the 100-year evolution of the industry, one thing is clear, the shift has happened and hanging around for another 30-40 years. I regret passing on affordable Apple stocks and dismissing bitcoin. Had I taken a calculated risk then, I'd be very wealthy today. I won't make that mistake again.
The Stigma
Affiliate Marketing is a legitimate business. Like many other business models and professions, including those that take a “do-no-harm oath”, there have been shady, dirty people. In the recent years, honest, legitimate affiliate marketers have worded tirelessly to end the stigma, not just saying it, proving it through their actions. The business model is unlike any other we've every seen. With minimal startup cost, low overhead, no prerequisites, regardless of background, education, status, an ordinary individual can learn a skillset and through application and consistency, become a self-made millionaire. The business offers significant earning potential, but it offers many freedoms and life changing benefits as well.
Shift Your Thinking
We all have a different definition of “living the dream.” Whether its, increased money, time, travel, choices, the affiliate marketing online business model can serve as your solution. Don't be an ignorant fool. The population as a whole, hears more negativity than anything. Media feeds negativity because negativity increases ratings. We've all have watched or read about the bad policeman, the bad teacher, the bad priest, the bad doctor, the bad lawyers, yet few of us have actually personally experienced it first hand. We still listen, raise our awareness and use caution but we don’t stop calling for help, we don’t stop sending our kids to school, we don’t stop going to church, we don’t stop becoming doctors and lawyers because of a select few. We trust the professions. So trust me when I tell you, making money online with affiliate marketing can change your world in wonderful ways. Do a little research, see what the hype is about, take action and live your dream!
Conclusion
Marketing will outlast all of us. The only constant in life is change. Marketing will continue to change and evolve but it will never end. After researching and understanding how affiliate marketing evolved, I too evolved. I had a choice, to reject it and pass up an opportunity to improve myself and my family and overlook experiences affiliate marketing earnings would offer us, or embrace the concept, absorb everything I can and use it to help others and reduce the stigma associated with affiliate marketing. I chose the latter.
In the past 10 years, the inverse relationship between labor and profits can’t be ignored. Successful passive income streams are not just possible, they are probable. Why should I continue to leave my family, work 12+ hours on my feet for less money? Nursing isn't paying me per patient, yet they keep increasing the nurse to patient ratio. Furthermore, I am not receiving increased compensated for critical patients and I absolutely don’t earn a paycheck while I sleep. My affiliate marketing business does though. I can increase my efforts, decrease my fuel, spend time with my family and see an increase, in my revenue. There's also an indescribable feeling the overwhelms you knowing my efforts today will continue to pay month after month, year after year, long after my efforts relax.
