Everyone knows what is advertising not much needs to be explained. Of course, on a broader sense it is a very deep subject, involving branding and marketing warfare. But that is not the purpose of this discussion. For now it would be sufficient to know that advertising's basic function is to promote a product or service.



However, the same cannot be said about MLM. It is a relatively new topic. It is a new method of marketing. It is not regulated; different countries have different laws to allow or disallow MLM. As yet there is no accepted definition of MLM. Some say MLM or multi level marketing means direct selling. Some say it is different. Otherwise, why use a different term? Some even confuse it with direct marketing, which has little in common with direct selling in a sense, as you can see for yourself.

Before we get more confused it is important that we get down to agreeing on some definitions. Otherwise we may find ourselves arguing in a circular fashion and getting nowhere.

Research from Google searches reveals that direct selling, multi level marketing or MLM, and network marketing actually mean the same thing. Here are some definitions found:

1. Direct marketing means the sale of products direct to consumers.

It involves direct channels of communication including using direct mail, mass mailing, advertising, marketing, leaflets, brochures, letters, catalogs, print ads, etc.

2. Direct selling means the sale of products direct to consumers, using a multi level structure to recruit down lines to further sell products.

Therefore, direct selling is actually direct marketing and MLM. Now you see why it is so confusing.

This definition is extracted from an article by Robert A Peterson and Thomas R Wotruba, who is a professor of marketing.

3. Multi level marketing is simply a hierarchical structure of recruiting down lines. It is implied that these down lines assist in the sales of products directly to consumers.

If it helps, MLM are actually direct selling and direct marketing. Sorry, I am getting you more confused, right?

If you do have the time, run through articles found in Google on the topics of direct selling and MLM. You will find the same companies like Mary Kay Cosmetics, Avon and Tupperware and many others quoted as examples of both direct selling and MLM.

4. Network marketing

Definition: A business model in which a distributor network is needed to build the business. Usually such businesses are also multilevel marketing in nature in that payouts occur at more than one level.

From this definition we can see that Network marketing is actually MLM.

5. Pyramid scams are distinguished by Robert Peterson and Professor Thomas Wotruba in their article as follows:

The central character of an illegal pyramid is that the founders and early entrants to the organization profit from the fees and inventory investments required of later participants when they join, RATHER THAN from revenues created by sales to ultimate users of the organization's products or services. Ella 1973 Brossi and Mariano 1991.

There you have it, described clearly for you. So, if we adopt a legitimate MLM structure to reward down lines we may be able to tap on the power of network marketing to promote advertising, online advertising in particular.

And by exploiting the geometric progression used in MLM compensation plans, our online advertising business may grow at an exponential pace.