Affiliate marketing – loved by many retailers for the high return on investment that it provides – is starting to be superseded by the power of the people.

However, new customer marketing models are just as cost-conscious and also provide a kickback for consumers prepared to use them.

In the States last week, Microsoft announced that its Live search engine will give cashback to consumers who use it to buy products from participating retailers. The technology giant says that it has the participation of 700 merchants already, representing about 10 million products, and that the cashback on offer to consumers will vary between 2 and 30 per cent.

No firm commitment has been made to a UK launch or to how long the cashback offer might run, but the move shows the potential for Microsoft to turn the online advertising market on its head.

Unlike most search engines, which charge advertisers on a pay-per-click basis, Microsoft is working on what it describes as a cost-per-acquisition model, with the advertiser only paying when the advertisement results in a purchase. Part of this payment is then passed on to the consumer.

In the UK, cashback sites are proliferating already – although none of them has anything like the brand recognition of Microsoft. This subtle change in online advertising hasn’t gone unnoticed by those who make their living from affiliate marketing.

One affiliate network is tooling up with the launch of an application to allow its merchants to get consumers to do web marketing for them. Affiliate Window launched a Facebook application last week to allow users of the social networking site to add products they like to their profile pages.

Users can add products to their wishlist by searching a database of more than 4 million items from a huge list of household-name retailers, including Comet,, John Lewis, Marks & Spencer and Woolworths.

Retailers can also add a Facebook link beside every one of their products. This allows a customer to click on the logo and automatically add the item to their wishlist without leaving the retailer’s site.

Consumers aren’t expected to do this out of the kindness of their hearts. They can earn money through the wishlist application by generating a commission against items bought – typically between 1 and 5 per cent – from a retailer they recommend. The commission is split equally between the friend who recommended the item and the friend who recommended the wishlist application.

With consumers effectively getting a discount without it costing the retailer any more money and the retailer only paying for marketing that is effective, it would be easy to argue that everyone’s a winner with these new models.

However, the online marketing world is evolving quickly. Once you bring consumers in on the deal, cutting them out again won’t be taken lightly.

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