Four years after the Internet was born, an online company called CDNOW started the online transaction called “BuyWeb”. Purchases are done by clicking the item on their website, that you are interested with. Also, it functions independently from a storefront.

CDNOW’s online system is the pioneer form of profitable affiliate marketing. After some time, many online businesses followed its steps to success (Amazon.com is an example). Affiliate Marketing has been an important tradition in the family of marketing strategies. The system has evolved into a consistent method of advertising and selling. Hence, it has become a staple amongst the large companies due to its effectiveness and economical characteristic. Moreover there is a little to no risk involved for both the merchant and affiliate.

Traditionally, affiliate marketing functioned on cost-per-click systems, which means that the ‘affiliate’ was paid for every advert or email clicked on or from or from their website. However, due to many fraudsters taking advantage of this system by using spam techniques, doing false advertising, creating ad-ware, using forced click techniques, doing SEO ‘keyword stuffing’, using tracking cookies and many similar techniques, the cost-per click system is not as popular as it once was.

Merchants would rather utilize Cost-Per Action / CPA or Cost-Per Sale / CPS. These schemes are similar because affiliates receive commission or revenue share when a website reader/visitor subscribes or avails of the merchant’s products being referred by the affiliate’s site.

Let say, you are my merchant and I am affiliated with you. I will be blogging about your products and services, and I will also post a link or ad that would redirect my interested visitors to your site. If that visitor who was redirected to your site bought a product from you, I shall receive a commission or a share from your revenue.

CPA and CPS systems have little or no risk at all for both parties, merchant and affiliate. Hence, these are the preferred form of Affiliate Marketing. It is a good thing that Google’s Latent Semantic Indexing will put CPS to the next level, as it makes it risk-free. The Google’s new Indexing system, automatically finds websites with nonsensical content, or if it has “keyword stuffing”.

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