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Thread: State Of The Industry: Affiliate Marketing In 2011

  1. #1
    ABW Ambassador Amy Ely's Avatar
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    Thumbs up State Of The Industry: Affiliate Marketing In 2011
    Posted last week on Search Marketing Standard, Owen Hewitson of buy.at's global strategy team describes the current status of the affiliate industry and its evolution in recent years.

    Topics include:
    • Changing business models
    • The transformation of performance marketing
    • A continued push for transparency


    Click here to read the full article.

    -Amy

  2. #2
    OPM and Moderator Chuck Hamrick's Avatar
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    Excellent article and the numbers I have been looking for, thank you.

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    Affiliate Manager affilorama's Avatar
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    Thanks for sharing this article! A compound annual growth rate of 16% sounds good!
    Michelle
    Affilorama Group Ltd
    Affiliate Marketing by Affilorama | Free SEO Software by Traffic Travis

  4. #4
    ABW Ambassador Amy Ely's Avatar
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    Sure! Glad to hear that you both found the article helpful

  5. #5
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Interesting take, and stats that actually verify what I have thought, but the article omits any mention of the 1000 pound gorilla in the living room of affiliate marketing - the Amazon tax issue. That's like discussing the Civil War with no mention of slavery.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, thereís no place for truth on the internet." -Howard Wolowitz[/SIZE]

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    Comfortably Numb John Powell's Avatar
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    Therefore, identifying and engaging with long-tail publishers has become an affiliate managerís mission, and a more telling measure of the health of a program than sales volume alone.
    Might be just the late hour, but I wish this had been elaborated on. How is he using "long-tail" here?

    Agree with the Hound on how could they leave out the Amazon tax. Looks like they are pointing to the increased dominance of the big affiliates.


  7. #7
    OPM and Moderator Chuck Hamrick's Avatar
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    I think the article was a positive spin on affiliate marketing which generally takes a back seat to all other marketing. Adding the Amazon Tax would have distracted from the focus IMHO.

  8. #8
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by Chuck Hamrick View Post
    I think the article was a positive spin on affiliate marketing which generally takes a back seat to all other marketing. Adding the Amazon Tax would have distracted from the focus IMHO.
    You make it sound like the article was intended to be a puff piece, not unlike a pre-sell to buy into a guru's ebook.

    The article was entitled "State Of The Industry: Affiliate Marketing In 2011" and contains this declaration near the beginning: "Although maturing, affiliate marketing continues to be a fast-moving industry where businesses must adapt quickly to succeed."

    What bigger issue is there that so many affiliates "must adapt [to] quickly"? What issue is having more of an impact on the "State of the Industry"?

    Another analogy - doctor to patient: "You're in great physical shape, ..... except for that aneurysm next to your brain."
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
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  9. #9
    OPM and Moderator Chuck Hamrick's Avatar
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    I felt the article was intended toward merchants looking to get into affiliate marketing and not affiliates. I have been looking for such articles to support my side of the business model so this was timely.

    Although the Amazon Tax or Affiliate Nexus is extremely important and needs attention the channel is not dead. On the contrary it is growing. If I ran my business on telling merchant the sky is falling then I wouldn't last long. Don't shoot the messenger but the focus here is on the growth.

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    It's becoming increasingly difficult for mainstream smaller affiliates to succeed in this business - that's not to say the landscape can't change, but some dominant players are emerging, and they have the resources to implement every affiliate business model out there. In addition to the Amazon tax issue (which is US specific), there is also another 1000 pound gorilla in the room launching their own affiliate sites. Aggressively.

    I've always felt affiliate marketing was a no-brainer for merchants - what could be easier than simply paying for performance?

    What I like here are the published numbers & projected growth.. hopefully there is enough room for all of us.

  11. #11
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by Chuck Hamrick View Post
    I felt the article was intended toward merchants looking to get into affiliate marketing and not affiliates. I have been looking for such articles to support my side of the business model so this was timely.

    Although the Amazon Tax or Affiliate Nexus is extremely important and needs attention the channel is not dead. On the contrary it is growing. If I ran my business on telling merchant the sky is falling then I wouldn't last long. Don't shoot the messenger but the focus here is on the growth.
    Merchants who are wiling to accept affiliates in Amazon tax states and deal with the tax have great opportunities to quickly build successful programs in the voids created by other merchants. That would be my selling point.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, thereís no place for truth on the internet." -Howard Wolowitz[/SIZE]

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    OPM and Moderator Chuck Hamrick's Avatar
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    It's becoming increasingly difficult for mainstream smaller affiliates to succeed in this business - that's not to say the landscape can't change, but some dominant players are emerging, and they have the resources to implement every affiliate business model out there. In addition to the Amazon tax issue (which is US specific), there is also another 1000 pound gorilla in the room launching their own affiliate sites. Aggressively.
    I completely disagree with this. Yes it is becoming increasingly difficult if you do what everyone else is doing. I am seeing new players all the time, some individuals, some small agencies. They are innovative in social, mobile, video. I see many big affiliates who are dropping off the radar due to paradigm shifts as the other end of the equation.

    One local affiliate made a decent living this time last year and relied exclusively on Google organic rankings. She tried to work honestly on backlinks but got sandboxed for 4 months, lost 2/3 of her income. She worked hard, cleaned it up and got back but didn't stop there. She now uses datafeeds which she learned in the interim and created more value for the search engines. Has mastered PPC and added more traffic there. She has negotiated better terms and commissions while still performing as a niche player.

    A guy I worked with at my last day job mastered social as an affiliate and is now his own agency. I referred him to several of my merchants where he won contracts to build out their reach.

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    You missed the point of what I'm saying.. and since you're not living it full-time, as an affiliate, I wouldn't call you an expert on this particular issue (sorry, no disrespect meant here).

    Of course affiliates need to be innovative.. but try finding the time & resources, while maintaining a suite of quality sites, staying on top of SEO, managing poor datafeeds and incomplete or last-minute coupon information (1-day offers sent the same day). There just aren't enough hours in the day to dream up the new ideas. And still maintain a presence online.

    In a perfect world we wouldn't depend on organic results, but it continues to be a valuable source of income (see the long tail comment in the linked article). If you don't do PPC, what are you left with? Organic, social media, good ol' word of mouth and natural backlinks.

    My own sites rely less on organic traffic than they used to, and while the goal is loyal readership, you can't say the smaller guy isn't finding it increasingly difficult to manage the above tasks given the fact that everyone seems to have launched datafeed sites (newspapers, government agencies like Canada Post, traditional points programs, etc), and conversely, established datafeed sites have hired bloggers.

    Of course smaller affiliates have to be innovative, but good ideas that you can afford to implement don't grow on trees.

    I've just spent two weeks spring cleaning my sites, and it's not an impossible task.. it's just getting tougher to compete.

    I'm also not derailing the thread - just providing an affiliate opinion on this comment
    many of these publishers recognize the need to incorporate social, true content, UGC, comparison and review elements under a single brand if they want to stay successful
    Easier said than done..
    Last edited by teezone; April 25th, 2011 at 06:40 PM.

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    OPM and Moderator Chuck Hamrick's Avatar
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    teezone, fair comments. From where I sit I have the luxury of choosing which affiliates to partner with for merchants and there are no limits to them. I for a long time have called affiliate marketing an perfect example of Darwinism. I don't envy your position and personally have never been an affiliate, caring to focus on the management side. My midnight oil is burned trying to find the most productive affiliates and convincing them to market my merchants against the 10k competitive affiliate programs.

    All I can say is that I have learned a ton by networking with my peers, reading everything I can get my hands on and trying new things. I started in SEO but am not a designer or programmer. Have a bit of experience in database, PPC and email. That said I have not headed down your path but many of my predecessors have.

  16. #15
    OPM and Moderator Chuck Hamrick's Avatar
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    Might be just the late hour, but I wish this had been elaborated on. How is he using "long-tail" here?
    Perhaps Amy can ask Owen Hewitson to guest post on this?

  17. #16
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    Chuck, thanks for reading my comments in the spirit they were written.

    This is coming off a rather sleepless stretch of Google Panda, merchant spring promotions, and an ongoing attempt to just make everything better.

    An affiliate manager once told me a type of page that was converting well for them, and that I should add one - at the time, I had no help whatsoever, and was trying to fix broken datafeeds. My response at the time was "great, can you build it for me?".

    We affiliates need to make time for those new ideas... and knowing the revenue is out there is definitely motivating.

  18. #17
    Outsourced Program Manager Jorge - SHOPiMAR's Avatar
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    It's a good positive article for our industry.

    We can always use more positive news to help merchants and affiliates understand and focus on making affiliate marketing work, because it does.

  19. #18
    ABW Ambassador Amy Ely's Avatar
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    Quote Originally Posted by John Powell View Post
    Might be just the late hour, but I wish this had been elaborated on. How is he using "long-tail" here?
    Quote Originally Posted by Chuck Hamrick View Post
    Perhaps Amy can ask Owen Hewitson to guest post on this?
    John/Chuck - Owen is actually on vacation, but I asked Matt Swan (another of our strategy team) to elaborate. He provide the following response this morning:

    A typical affiliate campaign will be made up of the top performing affiliates who generate a significant percentage of the sales/revenue. The remaining affiliates on the campaign will be classified as the long-tail. While individually long-tail affiliates may only generate a handful of sales, collectively they could be looked upon as a top performing affiliate in their own right.

    Traditionally we would consider the long-tail to be those affiliates that are not included within the top 10 affiliates on a particular campaign. However, this will depend on the size of the program and could be that affiliates outside the top 5 would be considered as long-tail affiliates. On a larger campaign with more affiliates driving significant volumes of sales, there could be 20 affiliates classified as ‘top affiliates’ while the rest would be considered to make up the long-tail.

    Does that answer your question?

    Quote Originally Posted by AffiliateHound View Post
    Interesting take, and stats that actually verify what I have thought, but the article omits any mention of the 1000 pound gorilla in the living room of affiliate marketing - the Amazon tax issue. That's like discussing the Civil War with no mention of slavery.
    AffiliateHound - you make a great point and I certainly understand your concern that such a critical issue was left out of a "State of the Industry" piece. That said, this article was originally intended to look at affiliate marketing on a global scale, which certainly includes the US (hence featuring the US statistics) but isn't focused entirely on the US. The trends pointed out are what we're seeing in the UK and Europe as well (and apologies if this wasn't clearly conveyed in the article). Therefore, diving into the tax issue on the US side wasn't the original intent, but is a point that could be included if this article is shared with US merchants and affiliates to further describe all the trends and challenges facing the US industry.

    Also, this is an editorial piece and is intended to spark conversation - which is only going to be helpful for all of us when gauging the health and future of the industry.

    -Amy
    Last edited by Amy Ely; April 26th, 2011 at 11:13 AM.

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