Warning: The Death of Affiliate Marketing is Coming Soon
Why is Affiliate Marketing Dying?
What did you think when you read this headline? Did you think this guy doesn’t know what he is talking about or did you think… man I had better read this before I waste a lot of time trying to break into this business?
First off I am an Internet Marketing Expert – I do not say this to brag, it’s certainly not anything to brag about. I’d much rather say I was a point guard for the Lakers, an Oral Surgeon, or a Company CEO. Those are things worth bragging about. I say I am an expert because I want you to understand that what I am about to tell you is not based on conjecture; it’s based on fact and experience.
I run a company that owns many internet properties. Our primary focus is on Affiliate Marketing Strategy and Implementation. A few years ago Affiliate Marketing brought in big money for my company. With each passing year my company grows the Affiliate Marketing Revenues are declining as a percentage when mapped against site traffic.
To be honest I’ve known about this since about 2004-2005, but it really seems to be accelerating now. During this time I have personally transitioned many of our top Properties to an Adsense Revenue Model followed by an Affiliate Model.
Main Reasons Why Affiliate Marketing is Dying
That’s a great question with a simple yet complex answer. First off the competition if growing as more and more people want to get involved in businesses they can run from home... but most of these people are unaware of the Affiliate Marketing problems and will never make much money. Many of these people have been recently laid off or lost their jobs due to the economic downturn. If they knew what I do about Affiliate Marketing they would think twice before just jumping in. These people need to know the truth about Affiliate Marketing.
- Browsers are now “Killing Cookies” at an alarming rate. If you don’t know what a Cookie is don’t even think about trying to market affiliate products until you do… it’s beyond the scope of this article, but you need to find out.
- Security Software is blocking cookies before your affiliate code is even set in your visitors browser
- Governments are aggressively pursuing legislation to both tax and regulate the internet
Some Quick Examples of Why Affiliate Marketing is Dying
Zone Alarm Claims you can get over 1000 attacks by just looking at a website. 1 in 10 sites are booby-trapped1, silently installing viruses and spyware or tricking you into revealing your confidential information.
1Based on information from "The Ghost In The Browser, Analysis of Web-based Malware" by Google, Inc, and reported in an article in The Register on May 11, 2007.
Because of the onslaught of problems brought on by the Affiliate Marketing Industry software companies are reacting aggressively to STOP security problems, and Affiliate Links are the innocent victims!
Some websites like Expedia will detect if a Cookie is blocked and give instructions on how to turn cookies back on. Why are they doing this? Because they want to track you! This is good and bad. It tells the visitor immediately… wow something is wrong with the link I just came from (Likely an affiliate link). That is bad for you as an affiliate marketer. If cookies were not being blocked or turned off Expedia would not invest in this problem.
Internet Explorer 8 Blocking Affiliate Cookies
This from a Washington Post Article:
Most online advertising is served to Web pages by advertising networks -- third parties. Blocking the ads would cut into the money Web publishers rely on, he said. While other ad blockers have been around, this feature worries some because it would come built into the world's most popular Web browser.
A Microsoft spokesman said that the feature, to be known as "InPrivate Blocking," was never designed to be an ad blocker, though "there may be ads that get blocked."
Instead, it was designed to stop tracking "pixels" or pieces of code that could allow third-party sites to track users as they move around the Web.
And here is a snippet about Firefox Add ons and Spybot Search and Destroy
“… the Firefox plug-in AdBlock, which eliminates most display advertisements automatically and gives me the freedom to block Flash and other annoying components of the Web.
“Microsoft’s addition, though, makes that a default setting within the browser, one that people who aren’t prone to adding plug-ins and such on their computer will love.”
Spybot Search and Destroy - What is being done to address ad-blocking programs that block cookies and / or scan for and delete cookies? For example, Spybot does both, it blocks affiliate cookies from being set and it deletes affiliate cookies after scanning. Spybot has been downloaded hundreds of millions of times, over 106 million times from download.com alone.
There are many other ad-blocking programs that identify affiliate cookies during scanning and delete them. Affiliate cookies are harmless and should not be labeled as malware by these programs, but unfortunately they are identified as such. There is no doubt that this is causing affiliate programs and affiliate marketers many lost commissions, especially among affiliate marketers that cater to tech-savvy computer users.
This Commentary from a Popular Marketing Forum Explains How Internet Security Technology is Taking it's Toll on Affiliate Marketers
The affiliate industry is probably on the verge of a major shake-out as new technologies are increasingly blocking more banner impressions and further interfering with cookie tracking. These various technologies are all ushered in under the guise of "privacy" and everyone agrees that internet privacy is a valid concern. However, privacy concerns are now making a publisher's right to earn money from their content take a back seat to privacy hysteria which threatens the livelihood of many smaller publishers. The net result is lower affiliate revenues and merchants getting a partial "free-ride" off affiliate programs hosted on innocent publisher’s sites.
Who is to Blame for Killing Affiliate Marketing?
Clearly in my view it is the large affiliate networks themselves. They have known about the problem for years and done nothing to circumvent it. Why? Because they are making tons of money off of people who have no idea what is really going on. Every day 1,000’s of people fire up new affiliate sites completely oblivious to the problem. They read some hype or myth about people easily becoming millionaires from affiliate marketing. It simply is not true. But it doesn’t matter because this seemingly endless stream of new online marketers is working for FREE! That’s right for FREE.
In affiliate marketing you don’t get paid until you make a sale! And often you won’t even be paid when you make a sale. Most people new to affiliate marketing have heard about ClickBank. But what they don’t know is that ClickBank requires you to sell at least 5 or more different credit card numbers and at least 2 different payment methods (Visa, MasterCard, or Paypal). They call this their customer distribution agreement. Then if you don’t make a sale in 90 days your account goes dormant and they start taking back your commissions at the rate of a dollar a day until you make you next sale!
Add to this Thresholds – both time and dollar amount and you may never see a payment for your work. This happens all the time. It’s free money to the Affiliate Program!
Forrester Research in August 2009 reported 59% of online shoppers are abandoning shopping carts at the point of sale. This is getting drawn out, but you should know if you are attempting to be an affiliate marketer the odds are very against you!
What Can You Do to Avoid a Dying Affiliate Marketing Industry?
Still want to give it a go? Well my advice is simple, do what I am doing. Focus on Adsense. Why? Because Adsense is run by Google and Google Affiliate opportunity through Adsense still works!
You get paid when someone clicks on your ad period. It may not be much or it could be a lot.
and another on
I use Adsense and I click on Adsense Ads (but never my own). Why would I click on an Adsense Ad? Because if I want to find something I know that it’s often easier and faster to find exactly what I want from Adsense. I will actually search Google and click Adsense because it’s faster and easier to find what I want.
I don’t care if a webmaster gets paid because of my click. In fact that is a good thing, because any webmaster who has properly placed an advertisement and helps me to find what I want quickly and easily deserves to be rewarded. Sure I know the advertiser will pay a few pennies, but that’s okay because they got what they want too. They got me as a customer. Win/Win.
There you have it. Hopefully a better method than Cookie Tracking will come along, and the Government will stay out of the way of Internet Development, but don’t count on it.
If you really want to make money online then sell your own stuff! This is what I am working on now!