We’ve already seen how an upstart company like IStockphoto can change all the rules in a category such as stock photography. Now talented amateurs can compete alongside professionals in a business category that was once reserved for a relative handful of competitors. Now, thanks to IStock there are literally thousands of competitors in this category – mostly amateurs. The result was that the cost of stock photography dropped dramatically. Some photographers may argue that the quality has fallen as well, but it is not a winning argument. Stock photography will never return to the old paradigm.

The same could be said for digital printing. Customers are no longer limited to their local printers, electronic files can be sent anywhere. The cost of printing is now lower thanks to the expansion of competition.

Affiliate marketing has allowed amateurs to enter the domain of professional advertising agencies. When an individual signs up as an affiliate of a company, he places advertising online (at his own expense) for a company. If his advertising results in a sale, he gets a commission on the sale. In effect, the company gets free advertising and the individual gets commissions on the sale of products that he doesn’t own. To date, this type of advertising has been the province of second tier companies like florists or golf products. Disney, however, is now testing this concept with their “movie club”.

I can’t help but believe that these challenging economic times might force more mainstream companies to consider the possible benefits of affiliate advertising. It’s hard to argue against free advertising when economic times are so challenging. If I’m right, we may see advertising agencies struggle against this new challenge. After all, how do you compete against free? The expansion of affiliate marketing seems to be inevitable in this bleak economy.