Successful Affiliate Marketing for Merchants

Pay-for-Performance—Advertising Versus Marketing

Back in 1996, Procter & Gamble (P&G) (www.pg.com), one of the nation’s leading traditional advertisers, was looking at the Web as a way to extend its reach and strengthen its brand with Internet consumers. But P&G didn’t want to pay for ads that didn’t perform. So in April 1996, P&G became the first company to move to a CPA (cost per action) advertising model by pressuring Yahoo! (www.yahoo.com) to accept a performance-based advertising plan that required the portal to be paid only when P&G’s banner ads were clicked—and not on the basis of mere exposures. P&G knew that a click-through represented an active interest by a consumer in its advertising message, and were willing only to pay for that ...