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  1. #1
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    Impact of economic downturn on AM.. thoughts..?
    I just wanted to throw out some questions for discussion.. assuming there is an economic slowdown, apart from the obvious (lower retail sales), how do you think it will impact the affiliate community as a whole..?

    Could this "cull the herd", ie. strong will survive, but part-timers not making enough might give up?

    On the flip side, will more people launch websites in an attempt to supplement personal income (perhaps not realizing the effort it takes to succeed!)..?

    Do you think there will be less competition among affiliates due to a decrease in the amount of publishers? Or the reverse..

    Will merchants spend less on advertising in exchange for more affiliiate traffic (ie. more incentive-based marketing)

    Any of the above, all of the above.. thoughts?

    The above is purely based on my own personal theories - I'm not collecting research (!), just curious if my thoughts are shared. I'm trying to be optimistic while tough times appear to be ahead of us. The obvious impact is a decrease in retail sales & consumer spending across the board (online & offline), but I was wondering if this might change the affiliate marketing landscape as we see it now.

  2. #2
    Affiliate Manager bs0101's Avatar
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    the current climate shouldn't have a noticeable affect on competition amongst affiliates. individuals who could succeed in this space with a relatively short learning curve probably have a reasonable amount of job security. although, it does seem like a great time for more companies to see more value in truly "performance-based" marketing, possibly shifting focus to the affiliate space rather than blowing huge amounts on traditional media avenues with murky ROI's. hopefully a wider array of products and offers will find an online home for everyone to promote.

  3. #3
    Troll Killer and best Snooper!
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    I'm going to be fine. I expect to make enough money to cover the bills and I'm still earning more than I would with a regular job. I don't expect to make as much this year as I did last year which is frustrating because earnings projections up until this summer put me at a significant income increase for this year over last year. I had plans for that extra money and now those plans are on hold.

    Yes, I think most of us long-time pros will be okay. Part-timers and folks who are just starting out are likely to get hammered. Selfishly, if that thins the herd I won't mind. But I do feel bad for people who quit their regular jobs within the last year to pursue AM full-time as I think they will come to regret that decision.

    What's that Bette Davis movie line? "Hold onto your hats, it's going to be a bumpy ride." And then there's the Chinese curse, "May you live in interesting times."

  4. #4
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    I am having a hard time getting even close to the levels of 4 or 5 years ago, but anything is better than nothing.

    I was earning $10,000 per month back in '03 and '04

    A lot has changed since then.

    Yes, the ones who have been doing this a while should be ok, but the newbies might have a really hard time making it work.

  5. #5
    ABW Ambassador Boom or Bust's Avatar
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    Assuming sharply reduced buying trends based on low consumer confidence, my opinions only...

    1. Higher quality affiliate campaigns will win out over the mediocre which would result in unsuccessful campaigns dying.

    2. More people will try to supplement their income with affiliate marketing with most giving up as a result of unsuccessful campaigns.

    3. I don't believe that solely the number of publishers will effect competition but that the quality of the campaigns they bring as well as demand effect competition.

    4. As competition increases and prices go down, commissions will also go down. I can't speculate on how merchants will distribute their advertising dollars. There will probably be a balance that will necessarily be struck based on actual ROI of the advertising dollar with weak sales.



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  6. #6
    What's the word? Rhia7's Avatar
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    Quote Originally Posted by Ed Byerly
    4. As competition increases and prices go down ---
    Why will prices [of advertised goods] go down as a result of affiliate competition?

    Do the number of Realtors affect real estate prices?
    Do the number of brokers affect the price of stocks?
    ~Rhia7 -- Remember the 7
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  7. #7
    Affiliate Manager FDC's Avatar
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    Ya, I think incentive based marketing will still rein strong. However, in tough economic times you may see more aggressive marketing even through traditional channels.

    As a whole, I think both sides of the spectrum will feel a bit of the crunch as people just aren't spending as much now with all the political and economic woes. All of a sudden job security is a major factor. I wouldn't be surprised if even more affluent channels take a hit as well, as the wealthy are not completely immune either.

  8. #8
    ABW Ambassador Boom or Bust's Avatar
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    Quote Originally Posted by Rhia7
    Why will prices [of advertised goods] go down as a result of affiliate competition?

    Do the number of Realtors affect real estate prices?
    Do the number of brokers affect the price of stocks?
    Market competition as a result of weak sales, not aff competition...



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  9. #9
    ABW Ambassador
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    There are still millions of Americans that have enough money to shop and not worry about any economic problems.

    There will always be wealthy Americans

  10. #10
    Comfortably Numb John Powell's Avatar
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    I try not to ponder all the things out of my control that may or may not effect me. One pundit on cnbc said today he was looking for 12% unemployment at some point before things turn around. He might be one of them.


  11. #11
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    There are many out there still with money as Julian says. Adopt the marketing plan of syms - "An educated consumer is our best customer" IOW - make sure your preselling and answering the consumers questions (pricing, shipping terms and coupons) so that they buy with your link, not look and you'll be fine.
    Continued Success,

    Haiko
    The secret of success is constancy of purpose ~ Disraeli

  12. #12
    AM Navigator Geno Prussakov's Avatar
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    To add to what has already been said, the gas prices are still high, and I have a strong feeling* that during this year's Q4 online consumers will prefer online shopping over shopping at a physical stores, especially when the online merchants' prices are attractive and the shipping (and return) policies are consumer-friendly.

    Geno

    -----------------
    *And it's not only a "feeling". Over the past 30 days I've seen a 35-fold increase in average monthly sales (in comparison to the summer months of 2008) at HalloweenMart's affiliate program, which clearly demonstrates that people still like shopping in the comfort of their homes/offices.

  13. #13
    Affiliate Manager Alan Hamilton's Avatar
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    Quote Originally Posted by John Powell
    One pundit on cnbc said today he was looking for 12% unemployment at some point before things turn around. He might be one of them.
    I didn't even realize that CNBC was still around!! LOL So that one won't be missed.
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  14. #14
    Affiliate Manager Alan Hamilton's Avatar
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    IMO, overall consumer spending is going to be down this year, both online and offline. I don't think there is any way around that. It comes with recession.

    I don't really think that newbies getting started and falling off will really decrease the number of aff marketers out there. When 1,000 fall off, 2,000 more always seem to pop up.

    Is it possible that marketing practices may be affected? When the game tightens, will there be an increase in the number who turn to less than honorable practices in order to keep their bottom line up?

    If advertisers decrease spending with Google etc., how will that affect ppc competition, organic competition, quality scoring etc?

    We are in a dowturn and I am planning on a subsequent 2 + year recovery. In between I agree with Rhea on the "live in interesting times" quote. I also think that those who have plans in place to offset it will be fine. But then again, it is doubtful that any of us can really say with any certainty how it will play out. So we certainly DO live in exciting, if not interesting times.
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