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  1. #1
    Analytics Dude Kevin's Avatar
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    Affiliate Marketing: Is the Sky Starting to Fall This Time?
    Having been an avid reader, erstwhile moderator, and constant promoter of Abestweb for near on 6 years now, I recall that every year since way back when a few threads get started here that draw remarks like "here's another end of affiliate marketing/sky is falling type thread". And I'd always snicker a bit, and move on with my day.

    Even when I took the big hit with New York last year, only part of me really thought that the foundation of our industry was getting rocked. Out loud, I'd quip that "your state could be next" or "this affects everyone". But internally, I think I more believed that I and my fellow New Yorker's were simply very unlucky.

    Now though, I see a string of incidents that actually make me feel that this industry is getting MUCH, MUCH worse as opposed to better.

    All of the tax issues, the Google crap, LinkShare/OneCause and a host of other things in the past 365 days is very disheartening. And I think it can be summed up by one statement.

    No one, aside from affiliates themselves, respects this channel as much as they should.

    When you can watch substantial payouts be pushed back another 30 days, or networks stealing from their own affiliates, and all the rest, you just have to wonder.

    Where do we go from here?
    Kevin Webster
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  2. #2
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    To be honest, I was thinking affiliate marketing will not survive a few years ago. And, we're still there.
    I'm not too good to remember what has been going on in the past, but each year we have our share of major problems.
    The dot.com bubble burst in 2000, the Florida update in 2003 when Google killed most affiliates sites... It will be interesting to have a time line of these major events.
    It's not over for this year, as we're approching the holiday season, we're going to see more and more greedy companies preying on affiliates.

  3. #3
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    Still don't because no matter what happens, in the end there will always be merchants out there that want more sales. And only paying for actual performance, is still the best deal. The channel is probably more respected by merchants in cases where they're more affected by it. More often the smaller merchants. Think of a merchant just starting out and trying to compete. SERPS, PPC, social marketing, other advertising. You might make it on your own but have a better chance if you had an army of affiilates trying all of that too. To a big merchant, probably not that much because affiliates only bring in a trickle. I doubt Walmart, Sony etc, would feel anything if they closed their affiliate programs down, little blip on the radar.

    Networks and parasites and doing dumb stuff, that's always been like that.

    With this recent Google stuff, it sucks that it's going to hurt some affiliates and Google is in the wrong on this one since they can simply grandfather current affiliates over to an Adsense account and I'm sure they can make it it's just used for payment if they wanted. From the list Leann posted, good news is it looks like most merchants have programs elsewhere. Not all and again not good news if a merchant you're making good money with is only on GAN. It's why merchants should have options.

    And I know I'll have some disagreement on this one and I'm fine with it but I also put this on some affiliates for supporting associations where some of these same companies sit as Board of Directors on wanting to represent this industry. The same ones that have pushed and partnered with parasites, drop you because of some new payment system etc.

    With the tax stuff not sure how this will all play out. Maybe we'll have that Streamlined Sales Tax Project that should make things better. Or focus on the merchants that haven't dropped you. I understand it's hard again if it's a merchant you make good money with. And this is actually keeping me from moving to a state I want to move to. I was living in one state where it wasn't an issue, moved to another where it wasn't an issue but my ultimate destination is NC where it is an issue. Eventually it's going to play out one way or another.

    I think the biggest threat to your own personal business is what I've talked about in the past. Kids growing up today, grow up with the internet, are very tech savvy, most have Facebook pages, know social media, most know how to make a blog at least and sites. Flood of competition.

  4. #4
    Grandma broke her coccyx! Uncle Rico's Avatar
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    Quote Originally Posted by Kevin
    Where do we go from here?
    At least for me, we go somewhere else. Affiliate marketing or whatever people want to call it is no longer worth the effort. Seasoned people here tell the affiliate marketing virgins that "it takes a lot of hard work" and "don't expect to earn much for many months" and "if you stick with it over time, you will be successful".

    With the constant google slaps and merchants terminating affiliates because of tax laws, I have come to the conclusion that it's not worth the time and effort anymore. There are just too many variables that affiliates can't control like: google slaps, new tax laws, toolbar thieves, merchants voiding commission, etc. You can work your rear off and stick with it for months or years and still fail because of circumstances that you can't control.

  5. #5
    Prince of Content Vinny O'Hare's Avatar
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    I have to agree with Trust, there will always be merchants looking for ways to sell their products. Affiliate marketing may change but it will always come back to the merchant needing customers at the lowest price possible.

    Who is to say tomorrow we can have another Florida Update and that will change the game. For some people it would make it better, its just a constant change. You just have to become a master at the game. When it changes your business model changes.
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  6. #6
    Manager - Affiliate Marketing Patrick Vesperman's Avatar
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    From a new affiliate manager's perspective - it seems you are all committed to making this succeed. Affiliates on ABW seem to be among the hardest working group of individuals I know. Collectively, you (we) are quite a force.

    Couple that with protecting our livelihood and the stakes go up as does the drive to succeed.

    I have read many of the "sky is falling" threads and while the arguments seem legit, affiliate marketing, in my mind is not being seriously threatened.

    Yes there are major concerns and threats in the short run. But in the long run, it seems like good news. Online marketing is growing. Companies are spending more and more on this form of marketing.

    Lets also remember that we are coming out of a recession. Hey, if realtors are still around, I wouldn't worry too much about affiliate marketing.

  7. #7
    Analytics Dude Kevin's Avatar
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    I dunno, Trust. Maybe it's just because I'm getting older, or a bit more jaded. Or because it became personal for me last year.

    I feel differently about this industry then I did 5 years ago. I had always hoped that it would become more affiliate friendly out there, and I see very few signs of that.

    The payment gaps are getting even more ridiculous. Paying commissions that far out is only acceptable if there's a salary to go with it. And we all know that that isn't going to happen (nor should it) in affiliate marketing.

    The risks are getting greater, and the upside is less and less.

    Yes, you can cling to a few smaller merchants that really want to utilize the channel the way it's meant to be used, but that comes with an entirely different set of risks.

    No industry or business model is risk free, of course. At the same time, I fear for those that make most of their living through being an affiliate. I think that their position is tenuous at best right now.
    Kevin Webster
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  8. #8
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    It seems to me that the ball is in the hands of the merchants - they are the one who will decide if affiliate marketing prospers or dies a slow, agonizing death:

    Will GAN merchants accept the loss of affiliates who can't or won't get an adsense account, rather than supporting the concept of affiliate marketing and move to other networks or in house?

    Wlll merchants continue to welcome parasites to their programs?

    Will merchants continue to impose harsher and harsher ppc restrictions, making it more and more difficult and expensive for affiliates to compete?

    Will merchants continue to reduce commission rates ostensibly as their response to a struggling economy?

    Will merchants continue to drop affiliates rather than collect state sales taxes?

    If the answers to these and similar questions are "yes", then while many affiliates will continue to prosper regardless, many more will fail, and it is problematic as to how many merchants would keep affiliate programs open with a fraction of the members they once had.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  9. #9
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    "The payment gaps are getting even more ridiculous. Paying commissions that far out is only acceptable if there's a salary to go with it. And we all know that that isn't going to happen (nor should it) in affiliate marketing."

    For one network. Still the same at CJ, SAS, Avantlink, Webgains pays weekly etc. So screw that slow paying network because a lot of those merchants are elsewhere. Make an adjustment.

    "The risks are getting greater, and the upside is less and less."

    Like you said, there are risks in every business. The new risk is the affiliate tax situation. And most of the other stuff has been around. I can go back and read old threads about this topic and it's Norton ad blocking or parasites which was a bigger problem back in the day or people worried about Froogle killing them off when Froogle is the one who ended up dying and so on.

    But the reward is still the same. And not to be overly dramatic but it is freedom. And to me, that's worth the risks and time involved.

    "Yes, you can cling to a few smaller merchants that really want to utilize the channel the way it's meant to be used, but that comes with an entirely different set of risks."

    True.

    "At the same time, I fear for those that make most of their living through being an affiliate. I think that their position is tenuous at best right now."

    Any more or less than any other time? Again, I understand if you're directly hit by something, like the tax situation or a network dropping you etc. Then you do what you can. Work with the merchants that haven't dropped you, switch your links to a merchant to another network if available. Start working on something new, expand what you do, who you do it with etc. Continue to work on the problem as best you can as well as growing your business as best you can.

    "Will GAN merchants accept the loss of affiliates who can't or won't get an adsense account, rather than supporting the concept of affiliate marketing and move to other networks or in house?"

    With that, a lot of them are actually elsewhere it looks like, I was surprised how many after looking at the list. Some are managed by GAN, so forget those if they're on GAN only. And GAN has a lot of bigger brand merchants and with a lot of them, the affiliate program isn't a high priority. Run correctly and having somebody dedicated to it, affiliate marketing is the best thing out there for any merchant regardless of size.

    And most likely yes to most of the other stuff. Focus on the good merchants, focus on what's working for you already, try to build on that. Try something new. Try to get new streams of traffic. Do something.

  10. #10
    Analytics Dude Kevin's Avatar
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    My point is though that these are all issues that should be getting addressed in a more serious manner, and all these years later, they are getting worse as opposed to better.

    I'm glad I have very little invested in being an affiliate right now. The channel is certainly one that I would gladly entertain as a merchant, but "small merchants" will not be enough to keep the whole model afloat on the grand scale.

    I've argued for years that WalMart and Target, as you mentioned, don't need affiliate programs. Those programs are havens for trademark poaching and other bad acting. And we all know that they aren't paying attention, or simply refuse to see it can be done better. Cross channel obfuscation covers all manners of sins, so I have little hope that that will change.

    I guess I'm simply amazed that some of the crap that is going on is in fact still going on. And to a large degree, we let it. This industry can't be taken seriously if it will continue to operated in such a hap hazard manner. In the end, that's my point.
    Kevin Webster
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  11. #11
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    -nevermind-
    Last edited by Trust; September 15th, 2009 at 12:22 AM.

  12. #12
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    I had a discussion similar to this recently. The answer will be different for everyone, but for me, the suggestion is to group together with merchants and affiliates that you trust and form better alliances. Having your own product is the best thing, but only if you have affiliates to sell it for you.

    Yeah, big brands can screw around, but I have always had this vision that online shoppers are looking for what they can't get at the big brands and that affiliates are the people to get the unique and interesting new products into the shoppers hands.

    We are the ones that can keep the "big guys" from taking over affiliate marketing and making it what "they" want it to be. We make our sites, we decide what to feature on our sites for sale, we decide what merchants are trustworthy, what OPMs help merchants and affiliates make money.

    Each of us is in control of who we promote, either as managers or affiliates. We make mistakes, we move on. I am very excited about the future of affiliate marketing because I see a chance to get more of the attention of people that have to change their business models because the type of marketing they were doing is gone.

    We are all creative, we all move with the tide. We are independent marketers for a reason. And we can all band together to dig through the crap and garbage and find the merchants and networks that are going to take us into the future.

    No, it isn't a "Suzy Sunshine" attitude, my views come from hard reality. I *had* to be an affiliate. I wouldn't have survived without being an affiliate. I will never be able to work for "someone else" again. Our industry may change, but we change with it, and that doesn't mean we work with the garbage. It means we clean out the garbage and look for the diamonds in the coal.
    Deborah Carney
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  13. #13
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    Some recent issues haven't impacted me personally, but I still have an opinion..

    The Affiliate Tax issue isn't applicable here in Canada, and I've always been on the receiving end of delayed monthly payments (in some cases, losing out heavily on exchange rates).

    I think there is a tougher barrier to entry now.. but that applies across the board. Google isn't welcoming to new sites anymore, but I still see first hand that original content is rewarded (I'm not opening the old content is king argument, btw, just making the observation!).

    I'm working harder for merchants who have limited programs. And I only use the parasite-ridden programs sparingly. No loss to me if they close their programs, as it also means the parasites will go away. I'm not allowing them to make money on my sites. Hopefully they will starve.

    But this industry still feels a little like the Wild West..

    I do believe it's a viable business model, but the rules are constantly changing. As with any business, you can always adjust & tweak accordingly. The beauty of this business is that most of us can shift our focus quickly & at little cost.

    (Loxly, I just crossed paths with your post and completely agree that we control our own sites!)

  14. #14
    Affiliate Manager jclaydon's Avatar
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    Merchants that understand the industry know that affiliates are the most nimble and intelligent marketers online. While other channels continue to struggle in this economy, affiliate revenue continues to grow. CJ released a lot of statistics after the last Q4, as did LinkShare showing increased share in client revenue (vs. other channles) and YoY growth for most clients.

    More than anything, I would say certain segments of our industry are in decline, and others are experiencing tremendous growth that is likely a combination of buyer behavior and innovative aproaches. Shoppers are much more savvy than they were two years ago, and those affiliates that are able to provide quality content to appropriate customers will succeed. Those that are unable to adapt to changing market conditions will decline and ultimately fail.
    [FONT=Arial][B][COLOR=Navy]Jonathan Claydon | [email]jclaydon@real.com[/email][/COLOR] |[COLOR=Gray] Director - Affiliate and Partner Marketing[/COLOR] |[/B] [COLOR=Blue]Real[/COLOR]Networks, Inc.[/FONT]

  15. #15
    ABW Veteran Mr. Sal's Avatar
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    Quote Originally Posted by Kevin
    Affiliate Marketing: Is the Sky Starting to Fall This Time?
    Look, as the father of Chicken Little , all I can say about my son is that: "Don't you worry too much about the (the sky is falling) part"...

    Just worry about your roof, because the roof... the roof is on fire

    I've argued for years that WalMart and Target, as you mentioned, don't need affiliate programs. Those programs are havens for trademark poaching and other bad acting. And we all know that they aren't paying attention, or simply refuse to see it can be done better. Cross channel obfuscation covers all manners of sins, so I have little hope that that will change.
    Now, all this old rooster wants to know is...

    When was the last time that you, Yes You, shopped online at WalMart or Target?

    If you had used some other merchants as an example, I may have understood the worries, but when it comes to WalMart or Target affiliate programs, I personally don't worry too much about them, because I rather drive to any of those two stores, than order anything online from them... (I have too many of them close by! )

    So any link I may put on my sites to WalMart or Target, I put them there as a convenience to my visitors, because unless I was a parasite, I don't think that I would make enough commission with neither of those two, in order to buy a new roof, if something happen to fall from the sky after all...

    Btw, the sky have been falling since 1943 - (Even before the Roswell flying saucer incident!? )


  16. #16
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    Affiliates market is dead - October 6th, 2003
    http://forum.abestweb.com/showthread...keting+is+dead

    Where do we go from here? April 15th, 2003
    IMHO affiliate marketing as most of us currently know it is a failing business model.
    http://forum.abestweb.com/showthread...ing#post179213

    Affiliate marking is dead - September 5th, 2006
    http://forum.abestweb.com/showthread...keting+is+dead

    The end of Performance Based Marketing? - February 3rd, 2009
    http://forum.abestweb.com/showthread...ighlight=dying

    There's lots more of that. There will be more of these type of threads in the future.

    Here's a way I like to look at it, something to think about. Whether it was back in 2003, there have been earlier threads, today, a thread like this in the future. There are affiliates out there making money, doing good and growing. If you're not, what's the difference between them and you? And don't use the crutch "they must be up to no good" because you just hurt yourself if you use that as an excuse. Some people over the years developed a crutch mentality and they're not around anymore. Of course there are people up to no good making money, there are also plenty of people doing things the right way, making money.

  17. #17
    Comfortably Numb John Powell's Avatar
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    Saw an interesting TV commercial for bing tonight. It looks like they are trying to do loyalty affiliate marketing from the tone of the commercial.

    Now prior to submit I do a little search and see that this is old news since April 2009. It does add to the changing landscape theme here though.


  18. #18
    ABW Veteran Mr. Sal's Avatar
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    Quote Originally Posted by Trust
    Affiliates market is dead - October 6th, 2003

    Where do we go from here? April 15th, 2003
    IMHO affiliate marketing as most of us currently know it is a failing business model.

    Affiliate marking is dead - September 5th, 2006

    The end of Performance Based Marketing? - February 3rd, 2009

    There's lots more of that. There will be more of these type of threads in the future.

    Here's a way I like to look at it, something to think about. Whether it was back in 2003, there have been earlier threads, today, a thread like this in the future. There are affiliates out there making money, doing good and growing. If you're not, what's the difference between them and you? And don't use the crutch "they must be up to no good" because you just hurt yourself if you use that as an excuse. Some people over the years developed a crutch mentality and they're not around anymore. Of course there are people up to no good making money, there are also plenty of people doing things the right way, making money.
    You missed the "end of affiliate marketing" from:

    December 8th, 2001
    im starting to think that this is the begining of the end of affiliate marketing
    And...

    October 10th, 2002
    As for the future of affiliat marketing, I predict the networks will continue giving the parasitic affiliates too much free reign to steal from the merchants, eventually there will be some audits done, the press will get ahold of it, and that will be the end of affiliate marketin

  19. #19
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    My take ...
    The world keeps changing and that includes commerce in Cyberspace.

    I've been away from the affiliate marketing spotlight for several years after many years of working at it full time and making a living at it. But the world of affiliate marketing started to change too much and I wasn't finding ways of changing with it. So I went off to a job in corporate America. All along my websites kept pulling in money, although less and less each year. Now they are in tatters but still pulling in enough funds to seed my recovery from the futile corporate America job binge.

    I see some positive things on the horizon. Like Microsoft planning to become Yahoo's search engine. Bing traffic is good and Yahoo's traffic is bad on my sites so the combination should be a nice boost. As our economy improves so will online advertising and purchases. A new source of online revenue might evolve when (and if) Google launches micro payments.

    I keep my eye on the evolution of the video web ... maybe there will be some hot opportunities there as television and the internet morph into one. If we wait for those opportunities to be headlines on CNN, it's too late.

    In my world, affiliate marketing may not be what it was eight years ago but it can be a cash cow to help fund new opportunities.

  20. #20
    Analytics Dude Kevin's Avatar
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    BTW Trust, I purposely chose "sky is falling" as a direct link to those old threads. Longer tenured members here probably remember each and every one of those threads. And They have always been "wrong" to a great degree.

    I think it's only fair to point out that my business, for what it is, has not been impacted to the degree that many of our fellow posters here have had theirs affected. I am not, in any way, whining about the current state of affairs.

    I am speaking to a cycle that we, as an industry, seem hopelessly incapable of breaking out of. While there is true innovation taking place (big nod to Avantlink there), there is also a TON of regression.

    And with that regression, a certain amount of mostly silent acquiescence to the bad practices that have sullied the reputation of true performance marketing. And we're letting bigger and bigger players get away with it.

    Haiko launched what amounts to almost a one man crusade on Rakuten. There is no way a bigger spotlight could have been shown on it. But it's still there. People are still using LinkShare in a big way.

    That, to me, is a sign that "true performance marketing" (sorry for using that term, Brian) is NOT the goal of the affiliate channel anymore. On either side of the network.
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  21. #21
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    Kevin, there are a *lot* of affiliates quietly walking away from Linkshare and GAN and new merchants that aren't "going there". But the uneducated merchants will still sign up, OPMs will still say "we can work with them and stay clean" and those networks will unfortunately be rewarded for working with the bad guys.

    The quiet revolution though is happening. Some of us are working diligently to educate both merchants and affiliates, and keeping our programs clean and growing them without huge fanfare, but having a good amount of success.

    No, we will never change the minds of the "big box" brands, but as Mr Sal pointed out, when *is* the last time you bought from Walmart of Target online? I never have and never plan too. I maintain as I always have that the future of affiliate marketing is in the small to midsized merchants that give real value to shoppers because of the personal touch and the dedication to their products and sites.
    Deborah Carney
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  22. #22
    Moderator MichaelColey's Avatar
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    Affiliate marketing continues to change, but it's far from dead. I think it's still in its infancy (or at least adolescent years).
    Michael Coley
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  23. #23
    Analytics Dude Kevin's Avatar
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    Quote Originally Posted by MichaelColey
    Affiliate marketing continues to change, but it's far from dead. I think it's still in its infancy (or at least adolescent years).
    Never said it was dead. Said it was getting worse.

    @Lox: I've always been a proponent of small and medium merchants. That's how I source products as well as merchant partners. I think they are a big part of the future of this industry.

    That all said, not enough positive change is happening. And far too much negative.

    Anyone can feel free to throw your hands up and walk away from this thread. No big deal I guess. I'm just one man voicing an opinion. I'm glad some of you have taken time to stop by and discuss it, whether you agree or not.
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  24. #24
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    Positive change gets no press.
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  25. #25
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    Affiliate marketing nowadays requires finding the best match between the traffic you have and the affiliate program that monetizes that traffic for the best ROI.

    Gone are the days of stepping in between the customer and a sale that was going to be made regardless of whose link they went through. The big boys figured this out and have stepped in to grasp this low hanging fruit. Microsoft with their cashback, big coupon sites that have mastered getting user generated content by the truckload and those companies ABWers call parasites. Even super affiliates who structure special deals with large programs to allow them to bid on trademarks. They hoover up all of the money laying on the ground that we used to pick up by making thin affiliate sites.

    It is harder than ever to find an affiliate program and then build a site for it. I'm sure that it still works for some people but even they have to admit it is much harder.

    You need the traffic first then you test with advertising and affiliates to find how to monetize the traffic you have.

    Independant affiliate programs aren't going anywhere. They pay good, they pay on time, THEY PAY.

    They also appreciate you if you are showing their product to YOUR traffic that you get for a reason other than selling their product. Opposed to creating a site to sell their product, bid on their trademarks and then get commission for a sale they would have made even if you had not slipped your aff link between them and the customer.

    Build something interesting and needed. Then monetize that traffic. The other way doesn't work much anymore.

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