The future of Affiliate Marketing?

[3wdl]

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I was having a chat with a few drunken affiliate managers earlier this week and a discussion came up about the future of affiliate marketing, and what changes we may well see over the next few years.

This week we've seen yet more changes from google, making it even more difficult and expensive for affiliates to use adwords and drive an effective ROI. For the second time in the past 6 months we've seen some affiliates who have been in the game for a number of years having to re-think their strategy. Not only is PPC marketing getting harder, but merchants continue to increase their own rankings in organic search, partly due to changes and partly due SEO becoming a more important part of their business.

So what does the future hold? It's not likely to get easier, and whilst normal users don't notice much difference with the google results it doesn't seem like their market share is likely to change much.

Some of the best advice that has been given is to create stickyness for your site - make sure that users are bookmarking it & having regular updates that both the engines and users love.

What are others peoples thoughts? Is it really all doom and gloom or will the industry continue to develop as it has over the past few years, especially with more brand names wandering into the frame.

[Anyanka]

Hey James,

I don't think it's doom and gloom at all. In the last week I've been on a number of meetings with some large portals etc who seem to think that the market will evolve into much more of a CPA one.

Some merchants already have CPA deals in place instead of CPC ones on some very large media portal sites.

[Spartacus]

From what I read on these forums it seems to me like the future has to definitely involve much less reliance on google!

[Brendon]

I think the bar is going to get higher, at least in terms of being a successful affiliate. Even now, it's becoming necessary for affiliates to have a better understanding of SEO / PPC than ever before in order to be a long term success. That trend will continue, I think.

Whilst some merchants are improving their own skills, that would tend to pull them out of the affiliate market, which in turn leaves space for new merchants.

Ultimately, small, nimble affiliates with good knowledge, and the driving need to succeed should beat the merchants every time - once companies start to reach an appreciable size (a necessary consequence of success as a merchant), it becomes harder to play online effectively.

There are a handful of exceptions, but the people capable of creating and running them are like hens teeth

[Luke]

Some of the best advice that has been given is to create stickyness for your site - make sure that users are bookmarking it & having regular updates that both the engines and users love.

I received this advice on this forum about 5 years ago.

I already knew it though because someone had told me around 1999 when I first started working in this field.

7 years later I'm still trying to make it happen!! It's the holy grail of affiliate marketing and anyone that pulls it off (as Matt has with this forum!) should be very proud of themselves. Today it's harder than ever to pull it off, a discussion on what a site can do to get return visitors would be very worthwhile...

[OLBG]

In the early days of affiliate marketing with programs like Amazon, and on Reporting.net (subsequently BeFree) etc it was positioned as a way for site owners to monetise their content. By this I mean, people who had a site with content and a userbase would use affiliate programs to make some money out of their users. Yahoo, MSN were seen as the big affiliates.

In the years that followed the industry changed and many affiliates became pure middlemen, almost hijackers of traffic be it SEO initially and then PPC. While it may be said some did add some value in the process, most didnt, and nearly all were just in the business of getting the user first and then passing them on to the merchant.

Whats left is some sites that are of genuine value and some that are just a collection of landing pages dressed up to look like sites. You can tell which yours is based on stats like your have members, searches for your site name, average time people spend on your site, and the proportion of your visitiors that come direct from favourites or typeins.

I see Google especially looking to take things back to what was originally envisaged. Cut out the middlemen entirely as Googles perception is that they add no value to the user experience. I can see this going as far as cutting out highly value-added middlemen (like say price comparison sites) on the basis that if the user really wants to do a price comparison of that they are searching for then they will go to them direct anyway.

I never really believed that the smash and grab affiliate marketing was a sustainable business but its certainly lasted a lot longer than I expected and watching a lot of people getting rich along the way I often wished I had gone that route. Even now I can see that theres still scope to make it work if you are very smart but its certainly getting harder.

So I see two main sorts of affiliates surving
- high value content sites that arent in the business of passing people on to merchants with the next click
- a few very smart affiliates who through use of technology and brute force testing can stay ahead of the algorythms

[Sammy aff]

Affiliate marketing is just about dead (assuming we are talking full time and trying to make a living out of it)
If not completely dead, fast decaying.
Especially through network sites, whose cookies are constantly getting blocked, search engines 'relegating affiliate sites to page 10 and beyond.

With ever increasing sophisticated software coming out through norton et al (whom make a great fuss of their superb blocking 'dodgy cookies' ..msn installed windows etc have the general public hoodwinked and on board)
It can only get worse


PPC is now in the final death throws... some may be doing ok now, but next week? Google is looking for you. Err there is not a realistic alternative, if google gobbles you up you will lose a minimum of 65% of your income; all things equal.

The only way for affiliates to succeed is thru non cookie/affiliate link id etc, there are a couple of none cookie tracking options available. Networks either don't want to know or don't care.(which is hardly surprising, given their 'all affiliates are thick attitude in the uk)

CJ made a bodged attempt through JS linking, however their attempt was flawed from the offset for obvious reasons.

Some networks especially in the us are getting their head round the problem and actively using alternative methods for tracking.

In its present form affiiate marketing through networks is without doubt dying very quickly.

Doom and gloom? surely we all saw it coming

Look up Chinese exporters if you are simply selling 'fancy goods' you can easily make more doing your own thing, 25 decent watches for $100...etc etc
The only way forward.

If you'r doing gambling/finance/insurance prepare to meet thine doom...

ps I know some affiliates have specially prepared 'landing pages' you of course should continue to do ok

[Brendon]

>> ps I know some affiliates have specially prepared 'landing pages' you of course should continue to do ok

Adapt, then, and join them. Affiliate marketing used to be little more advanced than throwing up a page full of banners. It's an extremely Darwinian environment, adapt or die. Those that do adapt can find unexploited niches. Those that can't will suffer. Don't be one of the ones that can't

[hirschnathan]

PPc is a strategy that needs time and thought. There are so many words to target at bids lower then ever before, its boom time.

I have never had it better.

Yes, if you are bidding on the word mobile phones, or free mobile phones, you will pay 25-30p a click, but there are words out there that cost only 1-3p.

Anyone who says ppc is dead, is bidding on the wrong keywords and not sending customers to the best deal.

[drivetowin]

Sammy

Seldom have I read so much crap in one post.

"Affiliate Marketing is just about dead"

Errrm don't know which country you're referring to but here in the UK revenues through affiliate marketing are increasing month on month, quarter by quarter, year by year, ask any of the main networks or purchase and read some of the independent consultants reports.

"Search engines relegating affiliate sites to page 10 and beyond"

Yeah, that would be why for some lucrative terms one of my sites appears at no1 in the listings above sites like yahoo.co.uk and bbc.co.uk then? - and before you ask no I don't mask my affiliate links at all - if you provide genuine original content then you don't need to imho.

Programmes like Norton present a challenge but not one which cannot be got around.

PPC is in the final death throws - errm I don't think so, again true that the barrier to entry is higher, and the terms for staying in are tougher - but as the saying goes "if you can't stand the heat - get out of the fire" - again it is a case of adapt and survive - true those people who have relied on brand name bidding are going to find life difficult, but frankly anyone who built a business solely on brand name bidding never really built a business, they merely took advantage of an opportunity.

Yes the world is becoming a tougher place, and only the fittest and those most able to adapt will survive - but that is how it should be - the day affiliate marketing ceases to be an easy ride is the day the industry takes a major step forward.

In a years time, those who have survived will be doing better than they have ever done imho - and yes, I am working on a number of strategies to make sure I'm a survivor. Am I going to share those strategies here? - not on your life, that would be like a turkey voting for Christmas.

What I think all affiliates should be doing right now is taking a real long hard look at their websites and asking "if I took away 100% of the affiliate content, would this website still have content, and more importantly, would it still serve a useful purpose?" - if the answer is yes, then imho you have precious little to worry about - if the answer is no - then it's time for you to have a major rethink.

Prophets of doom are often the best at ensuring their prophecies are self-fulfilling.

[Azam.net]

Good discussion James.

surely we all saw it coming

Yep, we did and that's why, if you look through the posts on these forums many years ago, I was warning people not to become dependent on Google and build quality sites with unique and original content. Yes, some PPCers had a good ride and made bucketfuls of money, but the people who have invested the time and trouble to build websites with a strong brand and loyal userbase - like A4U - will not worry too much.

Things are not easy for anyone though, with Google, Norton, Firefox et all attacking affiliates' businesses from all fronts

[pricethat]

but as the saying goes "if you can't stand the heat - get out of the fire" .

If there are any kids reading or students on dope it is not advisable to get into a fire. Try a kitchen instead

[Sammy aff]

>>Seldom have I read so much crap in one post.<<

Then you must have reading difficulties

I have been in this game longer than anyone here guaranteed, I have done well over $4m business with one network alone over the past 5 years. I resent your attitude, you are lucky if you are doing ok now thru affiliate marketing, it will not last. I did ok for 5 years so did many others. It is not the same playing field.

The Darwinism response is not in context, it is impossible to adapt to current trends because affilitism is not an exact science. God dictates who survives;who now goes by the name google. I expected some flak but take the misty glasses off before replying.

Networks willl spin the yarn about making loads of dosh, yep they will tell you to spend on adwords et al. it used to be the case that only 7% of affiliates made 95% of the networks revenue, it is now only 2%.

Networks are getting rich, affiliates are not. You need to try to fathom out why.

Brand name bidding? who would be crazy enough to do that, just get me number one for car insurance Ahh google quality score, affiliate link mm £12
50/60% will not track, (but that's by-the-by)
With tons of content, now a crappy merchant with just a landing page no content= ?


>>Yep, we did and that's why, if you look through the posts on these forums many years ago, I was warning people not to become dependent on Google <<
That does not take a genius to work out, unfortunately in the real world, lose google you are in it knee deep.

[1BIZLIST]

Come on Keith you are a relative noobie afterall and how dare you debate a comment made by someone, on a forum as well !

Geez Sammy ease up with the drama queen act, things change daily in all businesses, those that adapt survive and those that don't or wont fail, thats always been the case and always will be, no one is saying it is going to be easy but hey life sucks I guess.

As for Brand name bidding and your comment on who would be stupid enough to do that, well from what I understand some people made sh*tloads from doing just that, so are they stupid? hmmm go figure.

FYI I am not a superstar, just a noobie that wants to give this game a go, but I wont roll over and let g00gle decide if I can carry on doing what I enjoy or not, I will watch what others do, ask for advice when needed, do some trial and error stuff and make use of what I find out. The last thing I need however, is someone telling me to give up because the big G says GAME OVER.

Mark.

[morleymouse]

well theres a right load of crap in this post!

from the star it looked like it'd be a good one but you never can tell

okay heres how I see things, just my humble opinion:

Antony (OLBG) - spot on.

if anyone can build a site and build a customer base they will survive any changes. If google drops of the face of the earth and you can still contact all your customers directly then you will do well.

Infact having a *site* will hold strong, i've been and done many searches where you sinply hit a landing page "compare broadband" for example, I wont remember that, if I end up on an actual website rather than a landing page, ill remember it more than not.

Build a site, dont reply on PPC and landing pages. Yes you can force traffic boosts with PPC, promotion etc but you cannot beat free traffic.

Sammy, where to start:

- Networks, they're making all the money, they only make money if affiliates do. So if affiliate marketting is dying then networks are too

- Cookies, they are part of the web. Many sites use them to track logins, pass data and generally make the web more user friendly. They are not going anywhere, if norton etc get too harsh on blocking them, people will stop using norton. Imagine support forums, "i keep logging into your website but it keeps logging me out" - yeah thats norton, please disable it. If cookies die, something will replace them, websites need a way of being remembered by a users PC.

- Percentages, no idea where you've got them from. If its a viable source id be happy to look into it, but based on thigns ive seen they look... politely put... wrong.

- Brand bidding, im glad you think its a bad idea
Based on Alpha stats the cost of sale from our brand is 0.3% (ish 0.5% on a bad day)
Affiliate cost of sale is 7% BASIC + network fees
Hence why its not allowed. But if you still think its a bad idea, yeah its just silly.

Keith - as always no arguement with you, I agree dow nthe line, if you have a site that adds content you'll be fine.

I guess its a case of "i want to make money from the internet, and i can get paid on % through affiliate marketing so ill do that" where it should be "im really into that" or "i've been there" build a site THEN look how to make money from it.

From my own experience i've seen a lot of affiliate (some on here) see the average order value, conversion etc and build a site to sell hotels. Nothing. However I do my research and find some good old fashioned simple sites, Joe Blogs writing about his holiday to Benalmadena 3 years ago, explain the whole concept of affiliate marketting to him and tell him exactly what to do. Give him the HTML, tell him where to paste it and they do well, its all about the user, the content!

Needless to say ol' Joe Blogs now does regular sales with Alpha



Its not the same as 5 years ago, its not the same as 6 months ago for the big PPC players. Things do change, and I think you've either got to pull out now and be happy with what you've made or re-invest in change.