Amazon has over 1 million affiliate partners! I would venture to guess that Amazon's program is the best known and most successful ever. In the early days of the Internet where the emphasis was on e-commerce companies, a whole industry was created around affiliate marketing. Affiliate marketing couples e-commerce merchants together with traffic aggregators, content providers and e-commerce arbitrage experts. Now that we are in a Web2.0 world, do affiliate programs matter? Has Adsense and Adwords replaced affiliate marketing?

A short, but good reference guide for Affiliate Marketing is "A Practical Guide to Affiliate Marketing" by Evgenii Prussakov. This book can be read in one to two sittings. I learned quite a bit about affiliate marketing after completing this book. One important point Prussakov's book shows is that running a successful affiliate program is time and resource intensive. Despite Google's success in matching those seeking traffic to those sending traffic, there is still a robust ecosystem for affiliate marketing. Unlike Google Adsense, most affiliate programs work on a cost-per-action (CPA) versus a cost-per-click (CPC) basis. Google is dabbling with cost-per-action. If Google automates the CPA market as they have with CPC, traditional affiliate marketing may become irrelevant. In the meantime, affiliate marketing provides a meaningful way to drive traffic and transactions to e-commerce sites. Prussakov explains the keys to running a successful affiliates program:

- compelling incentives,
- honest and timely communication,
- tools (deep-links, variety of banner-ads - different sizes, data-feeds - dynamic content/pricing),
- and promotions (coupons, seasonal offers).

Affiliate programs can be run in-house or using an outsourced provider. Although, Prussakov's book is focused on affiliate marketing, many of the ideas can also be applied to more general consumer Internet marketing. In summary, affiliate marketing can be useful, but it requires know-how, resources, patience, and dedication before the program can produce any significant positive results. For e-commerce providers who have strong consumer Internet marketing processes, affiliate marketing can be added smoothly and successfully. For those that are still fleshing out their consumer marketing practices, these companies may be better off talking with an affiliate marketing agency to see if offloading their affiliates program will work.