View Poll Results: Would a recession impact affiliate sales and programs?

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  • A recession WOULD have a negative impact on affiliate sales.

    42 60.00%
  • A recession WOULD NOT have a negative impact on affiliate sales

    15 21.43%
  • Not sure

    13 18.57%
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  1. #1
    ABW Ambassador Ron Bechdolt's Avatar
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    Affiliate Recession Poll?
    Listening to Warren Buffett today say the feared recession is already here, I thought it might make an interesting poll on affiliates feelings regarding the recession and how it will impact this business. I'd be curious how others in this business feel a recesion would affect us all.
    Ron Bechdolt | Affiliate Program Management Consultant
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  2. #2
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    12/10/07 GOOG $718
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    Major ad spends down, clicks not converting because people not spending, it's trickling down across the board.

    Diversify and be very protective of every penny
    Continued Success,

    Haiko
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  3. #3
    Affiliate Manager Matt McWilliams's Avatar
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    It totally depends on the product/market

    iPod sales - yeah they will go down

    Insurance - not so much - in fact it goes up for a while

    Yeah this is a total shameless plug, but this is why I think affiliates should "diversify their portfolios" and be sure to include some recession-proof offers like education, loans, insurance, etc.

    Insurance is definitely a recession proof deal. Over a 5 year recession, insurance shopping stays consistent. It goes up briefly due to more middle class people shopping who normally don't then it levels off.

    The same can be said for educational offers for instance. A recession is not going to even touch them.

    </shameless plug>
    Matt McWilliams
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  4. #4
    Resident Genius and Staunch Capitalist Leader's Avatar
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    It totally depends on the product/market
    Yep.
    iPod sales - yeah they will go down
    Not so sure on this. Teens and 20-somethings like those, and they tend to have the kind of jobs that resist recessions. People may not spend money on a high-class restaurant, but there are always burgers to be flipped

    On the opposite end of the spectrum, senior citizens are probably pretty recession-proof; at least the ones who are on Social Security should be.
    Quote Originally Posted by Haiko
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  5. #5
    ABW Ambassador JudiMoore's Avatar
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    The only reason I voted Not Sure is because it depends on the affiliate. There is money to be made in any type of economy. You just have to be smart enough to make changes and sell or recommend what people actually want to find.

  6. #6
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by Leader
    On the opposite end of the spectrum, senior citizens are probably pretty recession-proof; at least the ones who are on Social Security should be.
    Senior citizens who depend on interest on savings to pay their bills are put in serious jeopardy when interest rates go down. If they have to invade principal, they further jeopardize survival in later years. Thus, the Feds artificially reducing interest rates in an attempt to ward off a recession could have a more destructive effect on a segment of the population that the recession itself.

    But, as this pertains to the question at hand, that would have little effect on am, as senior citizens on fixed incomes are not the target market for many am niches.

    Otherwise, I believe a recession would hurt most areas of am, with products (or services) that are true necessities of life being the exceptions. Even insurance, while important, would not be the choice when an out of work father whose home is being forclosed has to choose between auto insurance and feeding his family.

    Remember the difference between a recessions and a depression: A recession is when your neighbor loses his job. A depression is when you lose your job.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  7. #7
    What's the word? Rhia7's Avatar
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    The recession is already here and it's affecting everyone.
    The recession won't end affiliate marketing but things will be difficult across the board for affiliate marketers and brick & mortar based businesses.
    Heating/energy related prices and food prices will soar for everyone.

    There will be a problem with currency values & inflation.

    ... Bernanke believes the current problems are far worse than those arising from the bursting of the dot.com bubble in 2001. A fall in house prices affects more consumers than that fall in share prices did, and inflationary pressures now are greater than they were in 2001, limiting the Fed's freedom of maneuver. Indeed, some small banks will fail--and failing banks, even small ones that don't threaten the stability of the banking system, are likely to prove unsettling, to put it mildly.

    All of this leads most observers to expect the Fed to cut rates even more, which Bernanke is hinting he will indeed do ... Adding fuel to the inflationary fire is the falling dollar. Every drop in the value of the U.S. currency makes imports more expensive. And now there is a new problem: prices of once-cheap Chinese goods are rising as China copes with rising wage levels. The price-restraining effect of Chinese imports is, therefore, diminishing...[source]
    Many affiliate items are manufactured in China. The Chinese want a good standard of living too -- prices are going to go up -- their goods won't be so cheap to sell.

    Any imported goods will be more expensive [i.e. Persian rugs] and the challenge for the affiliate will be conveying value to the consumers.

    Dollar at low on economy worries
    http://www.ft.com/cms/s/0/6832ee42-e...nclick_check=1


    Myriad of factors behind dollar's sudden drop
    Economic fundamentals may explain direction, but other forces also in play
    http://www.marketwatch.com/news/stor...598DF45DB98%7D

    The above will cause headaches for many people/consumers.
    Affiliates will have to be sensitive in their outreach to the possible markets.

    Flexibility/adaptability and willingness to promote different items will be important characteristics for affiliates -- also affiliates will need to try different ways to promote items.

    On the other hand, the possibility to sell is still available for affiliates, in fact business in some sectors this possibility is booming:
    Online shopping in the UK reached a record high of over £4.5bn in the January sales, according to a new report. [source]
    Some people are in recession-proof occupations [i.e. healthcare, doctors & nurses, etc...] Even during the Great Depression goods were bought and sold; affiliates need to figure out how to tap the available markets.
    Last edited by Rhia7; March 4th, 2008 at 01:51 AM.
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  8. #8
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    The good news is: if you can survive the downside, imagine how much better you'll do when things improve!

  9. #9
    Analytics Dude Kevin's Avatar
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    I voted "Would Not", but only because "It Depends" wasn't available. Posters above are correct in stating a properly diversified affiliate can weather this storm, and perhaps thrive as ad spending on some terms is likely to decrease, opening the door for better placement for lower dollars.
    Kevin Webster
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  10. #10
    ABW Ambassador Rehan's Avatar
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    I think a recession would have a negative impact on affiliate marketing, but online sales are still growing so the net results in 2008 should still be better than in 2007.

    From http://www.internetretailer.com/dailyNews.asp?id=25168 (Jan 28, 2008 article) :
    Online retail sales in 2007 reached $175 billion, a 21% increase over $144.6 billion in 2006, according to a new report from Forrester Research Inc. This is the first significant drop in growth after years of around 25% growth. And according to Forrester Research projections, it will be far from the last.

    The firm forecasts: $204 billion in online retail sales in 2008, 17% growth over the previous year; $235.4 billion in 2009, 15% growth; $267.8 billion in 2010, 14% growth; $301 billion in 2011, 12% growth; and $334.7 billion in 2012, 11% growth.
    Even if a recession impacts the 2008 growth, online sales will most likely still be higher than in 2007.

  11. #11
    Affiliate Manager Howard Gottlieb's Avatar
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    Clearly consumer spending is not expanding which has to effect anyone selling darn near anything.
    I would rather live my life as if there is a God and die
    to find out there isn't, than live my life as if there
    isn't and die to find out there is.

  12. #12
    notary sojac Herb ΤΏΤ¬'s Avatar
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    Cool
    I think I'm getting a few more product sales because gas prices are high and people would rather pay shipping.

  13. #13
    Affiliate Manager PetsWarehouse.com's Avatar
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    Cartain industrirs are not going to be affected that much.

    The supermarkets will keep selling food.

    People must feed their pets. We see less walk in traffic recently but online is (very) slightly up.
    Bob Pets Warehouse
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  14. #14
    Believe knight01's Avatar
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    I voted that it won't have an impact. At least not much. As Matt mentioned there are some sectors that are relatively recession proof.

    Luxury consumer goods may be affected to some point, but what is misunderstood by many is that a recession for one is not a recession for all.

    There will always people with expendable income. Those that don't have the expendable income will most likely be looking for better returns / value on each purchase.

    Whether it is true or not, today most believe they can find better deals online than off-line. This will drive more consumers to ecommerce and result in increasing volume for online merchants as well as affiliates that provide help in finding those 'better deals'.
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  15. #15
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    I agree with all of the above.

    From a personal standpoint, I picked a niche that (I felt) was under performing, and had real potential for online sales, even when friends disagreed with me.

    So while we may be in a recession, my segment is actually going through a real growth phase - but only online. Bricks & mortar would be a different story..

  16. #16
    ABW Ambassador Ron Bechdolt's Avatar
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    Great thoughts and comments so far. I had hoped this would generate some debates regarding this and you all are doing a wonderful job.

    Personally I'm not sure how this will go. I lived through one recession already and did okay. I know what to expect for this one.

    My thoughts and hopes are that with a recession and higher gas prices people will naturally turn to internet shopping as a way to cut their expenses. Comparison shopping for the best prices, etc. I see this as opportunity in our business. Affiliate business has always been about adapting and finding what works at the current moment, we now just have to find ways to make this work for us.
    Ron Bechdolt | Affiliate Program Management Consultant
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  17. #17
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by 7-days
    I lived through one recession already and did okay.
    Unless you're much younger than you look, I bet you've lived through more than one. The last four were: 3/01 - 11/01, 7/90 - 3/91, 7/81 - 11/82, and 1/80 - 7/80. I think Alan has lived through about a dozen of them.

    I totally agree with everyone about certain affiliate models doing very well through the recession. I think overall we will be impacted far less than the "real" world.
    Michael Coley
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  18. #18
    ABW Ambassador Ron Bechdolt's Avatar
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    Very true Michael. I was refering to the one of the early 80's as it had the most impact on me financially. The others I was more prepared for I guess.
    Ron Bechdolt | Affiliate Program Management Consultant
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  19. #19
    I like traffic lights
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    This isn't going to be your run-of-the-mill recession though. This one will be a doozie.

    Probably more of a depression than a recession.

    The bad news is SLOWLY being leaked out via the MSM to avoid a panic.

  20. #20
    What's the word? Rhia7's Avatar
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    Online Advertising To Have Greater Share Of Marketing Budgets

    This article is promising: spending on television advertising will go down (except for special events such as Olympic and other sporting events) but online advertising will have a greater share:

    Screen Digest says that by 2012 advertising will be a three tier market with the most being spent online, followed by TV in the middle and traditional media on the bottom. When both search and display are combined, online advertising will see double-digit growth every year to 2012.

    "Whilst the overall picture for ad revenues is flat or in decline, two areas will enjoy growth - online will continue to grow at a pace, buoyed up by a strong search advertising market and digital TV channels will be taking a larger proportion of ad budgets by 2012, at the expense of the traditional broadcasters," said Ltang.
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  21. #21
    ABW Ambassador flamingoworld's Avatar
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    Quote Originally Posted by Haiko de Poel, Jr.
    12/10/07 GOOG $718
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    Major ad spends down, clicks not converting because people not spending, it's trickling down across the board.

    Diversify and be very protective of every penny
    Not sure it is fair to compare December which is holiday time with March?
    Yeah for me things are down from December, but up from last March. Different months bring different sales depending on holidays, seasons etc.

    I actually have found more people shopping online because they tend to be able to buy what they want and save money (on coupon sites) and it saves on gas. I know myself buying online saves me from those impulse purchases at checkout too.

  22. #22
    Kung Fu Master Eathan's Avatar
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    The recession has actually fueled our business. The crap economy has people hedging their bets sending gold prices damn close to $1000.00 an ounce, which has lots of people gearing up to hit the hills.
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  23. #23
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    Arizona, California, Florida, Michigan and Nevada were already in a recession at the start of the year. Those states account for one-quarter of the nation's total economic output.

    Interesting MAP

  24. #24
    Moderator MichaelColey's Avatar
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    Wow! Nice find, Adam.

    It's interesting to see that 30 states are in Expansion, 5 states are in Recession and 15 are at risk. I guess it all depends on how you look at it (and whether or not you live in one of the 5 that are in recession).

    It's interesting to look at the individual cities within various states, too. For instance, Missouri (one of the 15 at risk) shows 6 cities in Expansion and only 1 at risk. West Virginia (one of the 30 in Expansion), on the other hand, shows 2 cities in recession and 3 at risk. How does that work?
    Michael Coley
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  25. #25
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    I completely agree with Drewbert.

    This international economic crisis will be like one that most living Americans have never experienced before.

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