Affiliates were among the earliest adopters of pay per click advertising when the first pay-per-click search engines emerged during the end of the 1990s. Later in 2000 Google launched its pay per click service, Google AdWords, which is responsible for the widespread use and acceptance of pay per click as an advertising channel. An increasing number of merchants engaged in pay per click advertising, either directly or via a search marketing agency, and realized that this space was already occupied by their affiliates. Although this situation alone created advertising channel conflicts and debates between advertisers and affiliates, the largest issue concerned affiliates bidding on advertisers names, brands, and trademarks.[39] Several advertisers began to adjust their affiliate program terms to prohibit their affiliates from bidding on those type of keywords. Some advertisers, however, did and still do embrace this behavior, going so far as to allow, or even encourage, affiliates to bid on any term, including the advertiser's trademarks.

The only difference with the offline middleman and affiliate business program is that the online affiliate does not need to get hold of the actual product to earn revenue. He doesn’t need to shell out money to buy the product that he has to sell. All he has to do is create a site that markets the products of the producer. Every time he makes a sale, the producer will take over to send the actual products, receive payments and extend customer support, when necessary. A special web-based script records this process and thus the affiliate is paid for every successful sale he makes.
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