The first truly successful affiliate program was run Amazon. Amazon set up a system where a person linking to the Amazon listing for a book (and later nearly anything Amazon sells) got a small payment accrued if someone linked to the book. A small number of people started making a modest income at it, then book review sites started doing it, and generating a significant cash flow, and then it simply exploded. This, of course, drove traffic to Amazon, the likes of which had never been seen before, and the internet marketing boom was on.

For your internet marketing business, an affiliate program can work, whether you're the vendor, or the affiliate. It all depends on your business model; we'll discuss the affiliate side first.

Affiliates get paid for being a trusted source of opinion or information on a given product, topic or subject category. Bluntly, an affiliate only does the vendor good if they can generate traffic on their site, and that traffic needs to actually click through on the links to the vendors; affiliates need to provide strong content first and foremost, to get people to their sites.

That content has to be more than search engine optimized drivel; after all, a Google indexing spider never bought anything, and this is where a lot of affiliates fall down. Make sure you have content, that that content is updated, and that it's updated regularly.

Whether or not it's a good idea for an affiliate page to use a squeeze page (a front end where, to get at the content, someone has to give a name and email address) is open to some debate; a lot of people are growing tired of spam storms, and are getting more and more cautious about entering that data into landing pages, no matter how tempting the content might be.

From a vendor's perspective, affiliate programs make a lot of sense. Basically you're only paying someone if the traffic actually buys something; this is a darned sight better than pay-per-thousand-impressions, and somewhat better than Pay Per Click advertising.

However, an affiliate program is an adjunct to a multi-phase marketing plan, not a replacement for one. Do make sure you check your affiliates pages regularly; even small changes in indexing and sorting can turn an affiliated page into nothing, and you do want to make sure your affiliates are presenting you in a positive light.