Can we rely on affiliates to be so adaptable

[jess1]

I received an email from an old acquaintance who invested in three online internet shops, he was fairly demoralized about affiliate marketing today, having been there right at the beginning when it all started. He asked me “what happened to affiliate marketing, when did it become 70% ppc driven?” My reply to him was that when PPC first emerged, we all assumed affiliates were working on the long tail (their websites for organic seo and value added content) but could tap into immediate revenue whilst they worked on their sites. We assumed that affiliates were looking at their future in terms of business longevity. Some did exactly this and are reaping the benefits, today.PPC short term, content long term.

If this trend continues, and we can assume the networks derive most of their profits from ppc, then this concerns me a little. As more and more merchants implement ppc restrictions, today its no bidding on the name, tomorrow it will be no bidding at all, what happens the day after tomorrow?. There is no doubt that this is happening already, so where will this leave the affiliate in the months and years to come? Can we rely on affiliates to be so adaptable as to find other routes? Some maybe, those that can squeeze through the gaps and have forethought.

The longevity of affiliate marketing is reliant upon good sound affiliate business models that provides their traffic with something a little different, unique even, what started in this vein seems to be fast disappearing and affiliates who shouted about spyware or shouted about other affiliates unethical practices, some seem to have lost their way in their efforts to keep their heads above water, is this indicative of the state of affiliate marketing today?

If networks revenue is derived from mostly PPC and more and more merchants switch off to affiliates doing PPC, where will this leave the networks? Im not surprised that some affiliate networks are competing against affiliates, Im not surprised that some networks are slowly moving towards a traditional bespoke media agency, perhaps they see the writing on the wall?

[Mogga]

I think there are so many things that can happen that you'd be hard pressed to accurately predict the future.

I've seen a fair few merchants closing their programs. Some close because they don't make enough money to run a business, some close because they feel they don't need affiliates, some close because they've learnt the secrets of PPC, some close because they're making technical changes which should take an hour but drift off and result in loss of affiliate faith etc.

PPC works when sites sell.
Affiliate programs are successful when sites sell.
If people stop spending as much - or the high street fights back - then PPC gets squeezed - there'll be less reward.
If people spend more than the whole affiliate thing can grow and expand alongside the PPC but there is a real risk that affiliates could be squeezed out of the process.

You only have to look at how many agencies and intermediaries there are now to see that unless overall spend is increased then cash is spread out over a wider base and thus someone loses out.

Is content king anymore? Google's made efforts to try and get good quality PPC pages haven't they? Is that the new content?

[moredial]

An internet marketing newsletter I get asked this very question a few months back: why pay affiliates 20 - 40 % when ppc costs a lot less and has fewer overheads.

The origins of affiliate marketing was that the merchant found the super affiliates with their downlines and the affiliates did the advertising and promoting. Somewhere the merchants have lost sight of this and started spending money on their own promotions. This squeezes out the affiliates.

Not to mention that it now makes the SERPs look like spam.

To be successful, everyone still needs to find that niche that no one else is doing. Too many affiliates and the effort is not worth the reward. But habit keeps us going. You can now find affiliates creating their own affiliate programmes - has the whole world gone mad?

[Matthew Wood]

Interesting thread Jess, I was thinking along the similar lines yesterday..

http://www.affiliates4u.com/blog/art...eek_-_content/

There is more to AM than just PPC - some have just forgotton that!

[ceetee]

A while ago Affiliatefuture said the majority of their revenue was actually from content sites not PPC. That was a bit surprising to me but then I'm more a PPC affiliate.

I doubt though that PPC affiliates will wither away. Merchants use PPC affiliates, for reasons which have nothing to do with a lack of skill on their part. Although an affiliate might be competing against the merchant, crucially they're also taking an advertising space that would be occupied by a competitor. Even worse they could be working for a competitor. To paraphrase LBJ, better to have them in rather than out of the tent.

Of course there are other reasons too.

Edit: Unless I've misunderstood the discussion and Jess was talking about PPC direct to merchants?

[loquax]

A while ago Affiliatefuture said the majority of their revenue was actually from content sites not PPC

I'd be interested to know whether that includes cashback sites...

PPC + Cashback = how much of the affiliate landscape?

Jason

[Qui Gon Jinn]

PPC + Cashback = how much of the affiliate landscape?

Good question & good thread.

PPC is here to stay, purists (and that is not meant to be derogatory) may not like ppc, but it is significantly part & parcel (not the only part) of affiliate marketing. Web 2.0, well there is a thread dedicated to that.

Perhaps affiliates in different verticals should combine their sites to create a portal if they are potentially looking to be bought out making it more appealing to prospective buyers.

What I would like to do and have done for some time is develop a directory of good quality affiliate websites, all categorised, making life easier for merchants to find affiliates to work with which suit their requirements & forge relationships. Merchants have to have contact details to access info.

Even though is good to have choice, I just feel there are maybe too many programs & sometimes the new programs don't go through an incubation period to check & improve conversion rates leaving the affiliates to be the guinea pigs, if epc isn't good enough affiliates should look at alternatives or favour cpc models.

Is the conversion rate of a price comparison where they pay via cpc site much more than affiliate, i hear differing figures, one i heard was a standardish 1%

The suggestion of some networks drifting towards a all embracing media agency is interesting, but perhaps has been happening anyhow with closed bidding groups, buying or developing the bid management software maybe lends weight to this by hinting they maybe competing directly with affiliates. The shrewd affiliates have (teamed up already) developed their own so there is less dependency.

If you are wary & doing PPC direct to merchant redirect via you own site & chuck in a different & amusing refferer search term for fun. i.e. knickerbockerglory to anyone who remembers those.

The networks we should be advocating are those who are continually developing for affiliates & not simply developing tools with the true intention of looking to be bought out. You have to make your own judgement call on that. But those who are for the former lets get behind those and bring over the merchants from other sources as well as new ones.

One thing I would like to see more off is hybrid commission structures.

[moogie]

I reckon PPC affiliates are here to stay until Google decides otherwise.

I had an interesting chat yesterday with a very good affiliate and he was saying the big G is making it harder for the average affiliate to earn a crust what with quality scores and dropping rankings for pages with affiliate links on them.

I think affiliates will adapt to the ever changing circumstances and can be relied on to drive quality traffic to merchants for the forseeable future. How they will do that depends on what is needed at the time.

One thing for sure is you need your wits about you now to keep ahead of the game!

[pistol101]

Originally Posted by loquax I'd be interested to know whether that includes cashback sites... PPC + Cashback = how much of the affiliate landscape? Jason

I'll come up with some figures, certaintly the bulk of transactions are generated by content sites. I think it'll be fairly close between PPC and Cashback these days.

[loquax]

Do you call cashback "content" though? (not that it isn't content, but it'll be interesting to know if it dominates content or is a separate entity?)

Jason