Richard Brodie started it
with his book Virus of the Mind, which depicted and
scientifically explained how ideas multiply like viruses. Venture
capitalists Tim Draper and Steve Jurvetson carried it a step further. In
an article on "viral marketing," they described how Hotmail (a company
they funded) had exploded, gaining millions of customers overnight, by
virtue of good old word of mouth.
What these men were describing is a phenomenon that has set the stage
for a startling new boom in network marketing. In 1999 we saw
"multi-affiliate" programs [see sidebar definition] explode through a
mechanism we can perhaps best describe as viral marketing.
The leader of the pack was AllAdvantage.com, who set world records
for growth of a multi-affiliate or network marketing company. Their
"product"? AllAdvantage pays people for performing a service: watching
targeted advertising on a small browser as they cruise the Web. It was
the first multilevel pay model to reimburse people for performing a
direct service. From March of 1999 through March of 2000, AllAdvantage
signed up slightly over six million people.
Others have joined the Internet gold rush for "captured eyeballs"
(unique registrants), too. Spree.com boomed to one million people in the
same time frame, selling products with a multi-affiliate model.
Epipo.com, Eopinion.com, BigReferral.com, Cognigen, and others jumped
into the fray, sending the numbers of online participants skyrocketing.
By March of this year, we had on our databases approximately 89
companies with some form of multi-affiliate marketing using multilevel
It was a multi-affiliate population explosion! We set about to try
and measure this hard-to-measure phenomenon with as much accuracy as
Intense "Guesstimate" Research
There was one challenging statistical thorn in our side: how many
people belong to more than one of these multi-affiliate programs? In
other words, how profoundly might these multi-program participants be
skewing our multi-affiliate population numbers?
We started our research with names from an AllAdvantage online
message board. We sent 63 e-mail questionnaires and got an astounding 36
replies. Surprise! Of these 36 replies, 61 percent (22) said they were
in this one program only. Only 11 percent said they were in a network
We knew an online marketing group that is in Spree.com. That survey
resulted in 51 replies, yielding a figure of 50 percent who said they
were participating in only one multi-affiliate program. However, since
this was an auxiliary for a portfolio program, 100 percent were in a
network marketing program.
A BigReferral.com survey showed that 62 percent belonged to
BigReferral.com only. Small samples (fewer than five) in other growing
companies showed the same range of figures.
(Disclaimer: these numbers are over 90 days old, and may therefore
have changed significantly.)
How do you do an accurate study with the ever-changing Internet? Do
we include international multi-affiliates? AllAdvantage estimated at one
point that out of over six million, 3.7 million multi-affiliates (85
percent) were in the U.S.. What do you do when multi-affiliate companies
don't answer your e-mail and don't list a phone number - or when you
call and find yourself in an endless voice mail loop (the digital
version of Dante's Inferno)?
You go to the old time-honored process of coming up with a "good
guess." Here is a chart of our best guess. Scientific? A little!
||% In This Company Only
|Average of all three
|U.S.: 70% of above
Application Of Educated
The next challenge was to figure out how many participants belonged
to all the multi-affiliate companies on our list. Again, a lot of these
folks don't give phone numbers and don't answer email.
We started with a base that included AllAdvantage.com (6 million),
Spree.com (1 million), Epipo.com (1.2 million), Eopinion.com (500,000),
Cognigen.com (300,000), and BigReferral.com (200,000).
In the end, we credited the remaining 80-odd companies on our
database for another two million multi-affiliate participants. We took
this total of 10 million and multiplied it times the 40 percent shown in
the "Educated Guesstimate" chart. That brought us to a total of about
four million newcomers to multi-affiliate marketing. It seems that about
80 percent of these folks - 3,200,000 - are new to network marketing!
The Final Test
Were these numbers correct? Were they a good guess? How good?
To this basic data, we then applied Bayes' Theorem of Subjective
Probability. This mathematical formula, crafted by Thomas Bayes in 1790,
is used to quantify the value of the "hunch factor" in the knowledge
that exists in people beyond their guesses. (Bayes' Theorem is
startlingly accurate - it has been used by the CIA and the military to
find lost H-bombs and nuclear submarines!) Eighteen members of the
Network Marketing Trend Analysis
Institute helped with the final plotting of the formula.
The probability of there being four million new people came in at 41
percent correct. The other 59 percent probability said the number was
too low and that it should be higher.
It Is A Great New Age!
This is the greatest growth of network marketing since 1970-71, when
it is estimated that Holiday Magic, Koscot, Amway, and Mary Kay brought
in a similarly sized population wave. Today, we have new people and new
blood being exposed to network marketing in a kinder, gentler way.
Now, most of the multi-affiliate programs do not pay nearly as much
as network marketing companies do. (The top earner in All-Advantage.com
earns about $5,000 a month.) We predict that this will whet new
entrepreneurs' appetites and lead them into selling and training, rather
than just referring - in other words, into becoming full-fledged network
marketers. We are on the edge of a booming new frontier! The probability
of these "New" Multi-Affiliate Programs surviving as we know them is
questionable to say the least. We are seeing instability in the Internet
advertising market which will affect them greatly. The bright side is that
people that have never thought or knew about MLM are being introduced to
our great concept.
The full details of this research are available at
MLM and Multiaffilate Library