From M/Cyclopedia of New Media
In September 1997,amazon.com announced that enrolment in its Associates program had reached 15 000 online booksellers. (Timmers, 2000, pp.63) The program itself has been quite successful with Amazon.com reporting signing up at least 800,000 associates by September 2002.At this point, the vast majority of online retailers have an associate program. (Krishnamurthy, 2003) The Associate is essentially an online referral arrangement.
The basic idea of Associates Program of Amazon.com:
Small sites would act as traffic generators for Amazon.com that post content on their site with a link to Amazon.com.
Each site would receive a commission of 15% for any referred purchase and 5% for any other purchase made by that consumer.
Amazon.com would benefit not only by traffic generation, but also by branding. Since the small sites would carry an Amazon logo, it would enhance the online presence of Amazon.com.
Amazon.com paid for the customer traffic after the fact as opposed to traditional advertising where other companies pay ahead of time without knowing the level of traffic that will take place. (Krishnamurthy, 2003)
Amazon.com distinguishes the following groups of Associates:
1.Publishers : they have put their books in Amazon.com’s catalogue, possibly with the Advantage program that is a complementary piece in the puzzle to achieve global presence, and also see these books online through Amazon.com’s service.
2.Author: this is an interesting example of how easy access to functionality gives the possibility of assuming multiple roles, namely being an author as well as a bookstore.
3.Familiar Web sites: these are the sites that generate a lot of traffic, like Netscape or Motley Fool.
4.Print Publications Online: these enhance their online publication by referrals to books, which is a natural extension of any online publication that references book, e.g. for any academic article published online.
5.Special-interest Web sites: these are virtual communities around a shared and focused interest. Their advantage to Amazon.com is that of books. Amazon.com could ultimately build such categories by itself, by analyzing purchasing patterns. (Timmers, 2000, pp.63-64)
However, it has become challenging to run Association Program because of new software. When an individual visits software maker XYZ to download a program, the program marks the person’s PC. After that point, if this individual goes to an affiliate ABC and visit’s Amazon’s site, the program will disguise this to make it look like Amazon actually got this business from XYZ’s site. As a result, money that must rightfully go to ABC goes to XYZ. (Krishnamurthy, 2003)
References
Krishnamurthy, S. (2003) E-Commerce Management:Text and Cases, Louiseville:Transcontinental Printing,Inc.,
ISBN 0324152523.
Timmers, Paul. (1999)Electronic Commerce: Strategies and Models for Business to Business Trading , England: John Wiley & Sons Ltd., ISBN 0471720291
Sharon Tse 02:02, 28 Oct 2004 (EST)
