The Future of Affiliate Marketing
There has been a lot of talk in affiliate circles lately about Google slapping affiliates. It has become pretty clear in the last year that Google does not like affiliates and intends to be a "super affiliate" itself. It is also clear that Google will continue to take money from the big spenders - the likes of uSwitch, MoneySupermarket, GoCompare - even if they are just super affiliates themselves. Google does not reserve any love for the little affiliates, particularly in Adwords.
However, it does not have to be all doom and gloom. In any business, you get knocked down. You have to pick yourself up again and learn to innovate. Lets take a look at the main types of affiliate sites: comparison sites, product sites, cashback sites, discount voucher sites and content sites.
Comparison sites, if done well, are one of the most useful sites around. They will help users find the best product and services quickly and easily. That in itself poses a threat to Google's revenue. If a user visits one comparison site and finds the product/service they are looking for, that user will not search in Google multiple times to find the same product/service.
Comparison sites also have a high level of competition from bigger companies. Think about all the high profile comparison sites out there: uSwitch, MoneySupermaket, Kelkoo, PriceRunner, PriceGrabber, GoCompare etc. Is a little affiliate really going to be able to compete with them?
Verdict: There is limited scope in comparison sites. The competition is high, and do not expect Google to like you. If you are going to do it, then specialise in a tight niche with little competition.
Product sites are the ones that concentrate on a particular product. They may contain product information, user reviews and price comparison. They are often "mini sites" in that they contain a relatively small number of pages (less then 25). There is a huge range of different product niches available, so it should be possible to find a product niche with a low amount of competition from other affiliates. You will, however, face competition from merchants selling the same products.
Affiliate product sites advertising Adwords have been hit with high minimum bids in the past week. It is obvious that Google has taken issue with them. This may well be because of the big advertising agencies and merchants complaining about the PPC competition from affiliates. Whatever the cause, the scope of promoting an affiliate product site in Adwords has reduced significantly. It is still possible to do well in organic search though.
Verdict: There is limited scope for product sites in Adwords. However, you can still do every well from organic search, as long as your site has high quality, unique and content and your site is optimised.
Cash back Sites
Cash back sites have seen a huge increase in popularity lately. Why wouldn't anyone want cash back when buying a product?
The biggest threat to cash back sites is the number of competing cash back sites. If you are going to create a cash back site, make sure it is different to the rest.
Verdict: There is scope for cash back sites if you can create something that is different from the rest of the pack. But be careful, there is a lot of competition.
Like cash back sites, Voucher sites have increased in popularity massively lately. And like cash back sites, the competition is huge. Every man and his dog seems to have a voucher site.
Verdict: The advise here is exactly the same as cash back sites. If you are going to do it, do it well and be very different.
A content site is a website that is made up of a relatively large amount of unique content. Wikipedia is an example of a massive content site. Money Saving Expert can also be considered a content website. Most blogs are, by the very nature of them, content websites.
They are not easy to do well because they require a lot of high quality, unique writing. You need to research the right niche to focus on. They need to engage users and encourage them to come back. You need to try and protect your content from being stolen. In short, they require a lot of hard work.
However, the rewards are there. Content sites are the type of websites that are most likely to do well in Google's organic search. They offer real value to users. The best kinds of content sites are those that serve a real purpose. My general rule of thumb when creating a content site is to forget about making money. Instead, concentrate on getting the site right first. The site has to built to attract visitors and make them stay on the site and enjoy their experience. Worry about making money from the site once you have achieved that goal.
So it is affiliate marketing in reverse. A lot of affiliate marketers think about making money from a particular niche and then try to figure out how to built content for it. A great content site comes about from thinking about the content and user experience first, and then figuring out how to make money from it.
Verdict: Content sites are probably the hardest type of site to do well. However, they are the type of site that Google continues to love (in organic search) and have a real future.
A word about traffic sources
An article on the future of affiliate marketing would not be complete without a word about the source of traffic. Most of us think about Google when we think about traffic. However, to really build a solid business, one should not be totally reliant on one source of traffic. It is possible to build a solid base of traffic to your site other sources. Every niche has online communities. Find those communities and engage with others in it. Build your reputation as an expert. Help others. It is all about karma.
So what is the future of affiliate marketing?
As Google becomes more and more interested in becoming an affiliate itself, the focus of affiliates will need to change. Small, "thin" sites are likely to die off. Affiliate sites that are obviously about making money for the affiliate will have a tough time. The affiliates that survive in this game are the ones that really care about their niche and their users. Their websites will add real value to the users. The content will be unique, informative, engaging. The actual business of making money will be more of an after thought. The real focus of affiliates will be making better and better sites and a superior user experience.