Affiliate marketing is one of the most used business models when it comes to online business and making money online. However, the question seen above can pop up in affiliate marketing communities from time to time.
Usually, this is because affiliate marketing is a fast moving type of business, with constant and quick innovations. With each innovation, people start to wonder if the business model still works or is profitable!
The latest announcement from Amazon regarding the reduced commission rates in their affiliate program was a prime example of this, and I myself heard this question asked in online forums following said announcement 🙂
Also, some people expect quick results from this business model, and when they don’t get them, often like to shout from the rooftops that this way of working is ‘dead’.
So today we are going to delve deeper in affiliate marketing and try to answer the question many like to ask, “Is affiliate marketing dead?”
What is Affiliate Marketing?
Simply put, this is a negotiation between two parties. The affiliate needs to promote the merchant’s products. If they manage to make a sale, they earn commissions.
The History of Affiliate Marketing
First, let us discuss how affiliate marketing began. This did not merely pop up or became a trend. To fully understand the model, below is a rundown of its timeline.
Affiliate marketing started in 1989. The very first internet marketer was William Tobin. He came up with the program for his floral business called PC Flowers & Gifts.
With the help of Prodigy Network, (who still operate as a crowdfunding platform to this day) he made a structural framework wherein for every sale generated in the platform, Tobin is responsible for providing them with a commission from the products’ original price. The process, therefore, became the basis of affiliate marketing today.
By this year, we have statistical data showing that Prodigy made more than $6 million dollars annually from sales commissions.
The success earned from the framework made Tobin apply for a patent regarding the idea. At the same time, Amazon also organized its affiliate program called Amazon Associates. Amazon is probably the cause of the affiliate marketing business model going viral, because it was the first one that caught global attention.
Later that year, multiple programs followed Amazon’s. These include LinkShare, or now known as Rakuten Advertising, an affiliate network. They provided a platform for both affiliates and merchants so they can find each other easier.
Because various affiliate programs and networks simultaneously arose in the recent years, a man named Wayne Marciano developed a directory for all available affiliate programs called Refer-It. This is a tool made to provide a more efficient search for people who want to promote products. After this, similar software services also popped up online.
Although Tobin applied for a patent in 1996, this was only approved and issued in the year 2000.
In the same year, the Federal Trade Commission (FTC) formulated the guidelines for affiliate marketing.
They specifically focused on the subject of disclosures and disclaimers. The stated guidelines ordered affiliates to inform their audience that they are an affiliate of the product, and thus they earn a commission if the customer buys from their link. From there on in, affiliate marketing continuously grew.
The Growth Of Affiliate Marketing
It was not difficult for affiliate marketing to make a name for itself because aside from being very accessible, it also provides great opportunities for those who want to earn a passive income.
However, you have to note that as it becomes more popular, it also undergoes a lot of changes. The following changes are mainly down to the shifting technological world we live in:
- Mobile Devices
In this day and age, it is very uncommon for an individual to not have a mobile phone. This being stated, Awin’s research shows that more than half of affiliate referrals are from these devices.
- Technological Enhancements
Recent developments in technology also affected affiliate marketing. According to Entrepreneur, two of the largest and most-favored niches are products under Artificial Intelligence, and voice commands.
- Social Media
Social media is, undoubtedly, a big part of a person’s everyday life. This affected the methods of how an affiliate promotes a brand’s product.
Aside from blogs, websites, and ad spaces, they have also turned to social media sites like Facebook, Twitter, Instagram, YouTube, and the likes, when it comes to establishing their visibility.
This became easier for affiliates. According to TradeDoubler’s data, 74% of users admit that social networks impact their purchasing decision.
To evaluate its growth over the years, here are other statistical data that you can refer to:
- In 2016, it was concluded that 81% of companies have their own affiliate programs. Meanwhile, 84% of publishers (content creators, bloggers, website owners, etc.) are affiliates, themselves. –MediaKix
- The search rate frequency for the keyword “affiliate marketing” increased by 44% between December 2017 and June 2018. – Google Trends
- 94% of publishers are a part of more than one affiliate program. – Rakuten
In 2018, the total number of affiliate programs in the United States reached 11,400 according to AM Navigator. As you can see, affiliate marketing is continuously growing and developing over time. If you can work out how to even get a small slice of this pie, you will have a solid business on your hands 🙂
The Problems with Affiliate Marketing
Affiliate marketing, even though it is one of the simplest types of businesses to start, does not guarantee success. Those who continue to be affiliates even claim that there is very little conversion rate in a lot of programs. I myself have heard many stories of affiliates stopping their journey without finding sustained success.
So, what are the problems that you may encounter in affiliate marketing, and in the concept itself?
Choosing a Niche
Like what is always said, the first step is always the hardest. This also applies to affiliate marketing.
Finding a niche to specialize in can be hard for most, if not all, beginning affiliates. This is either because of too few choices, or there are too many. Either way, a person tends to get overwhelmed when they are presented with limitless choices.
Traffic is what keeps a platform going. It doesn’t matter if you are using a website, a social media site, or a video content; you need to gather an audience that will be able to receive your message.
This is a common problem. You don’t always start with a large audience. In quite a few cases, the content creator needs to start from scratch.
The main goal of affiliate marketing is to make sales, specifically to convert your audience to consumers. This is a broad topic, and there is more than one way to do this. There are various marketing strategies that you can use, but none assures that you will get a sale.
Content is the most important part of affiliate marketing.
Aside from promotional materials that will be provided by your merchant, your content, may it be an article, a post, an image, or a video, will also be the key in attracting your target audience, and consequently convert them to customers.
These are just some of the common problems that an affiliate may face in affiliate marketing. This is not just limited to beginners; even those who have grown up in the field still have problems with these from time to time.
The Solutions to Affiliate Marketing
Now that we have gone over the issues in affiliate marketing, we also need to know how to get past them. This being said, below are the things that you can do to solve the problems above.
Before you start, you should highly consider conducting thorough research about affiliate marketing, the niche and its products, and the market that you should target. For one, you cannot just promote a product if there is no market for them.
Specifically, here are the things that you should consider when choosing a niche:
- The niche you have a background in
- The products you enjoy using
- Brands that offer you preferred products in high quality
- Affiliate programs with good offers
- Marketing strategies that will fit your goals
- The right group of people to target
- The right platform to use
Once you come up with a complete and concrete answer to the topics above, not only will you get rid of the problem of finding a niche, you can also exterminate underlying queries that can hold you back in the future.
Also, you need to choose a niche that you are passionate about. This is going to help you maintain a healthy level of motivation as you move along.
Now, to gather traffic, you should make yourself seen by your audience. You can do this by being available on most, if not all, platforms. Particularly, here are some sites that you can join:
- Forum Sites (Quora, Reddit, Tumblr)
Signing up for an account for these platforms will be of no use if you don’t strive to make a name. You should frequently publish posts either about you, or the brand, or the products you are promoting.
Along with posting updates, socializing can also help you be more recognized. You can react and reply to your audience’s comments. Make sure that you stay engaged, especially if you want to position yourself as an authority in that niche.
Engage Your Audience
Your audience will be your source of sales. Your goal is to convert them to customers. To do this, your marketing methods should be formulated in a way that will persuade them to do a specific action, in our case, to purchase the product.
To do this, choose strategies that match your product. Keep in mind that these should be kept cost-effective as you don’t want to invest too much of your potential commissions, or you’ll be left with little to entirely no profit.
If you are having trouble creating content, the best way to solve this is to brainstorm. List all possible and relevant topics that you can base your content on. It will also help if you can look up the current trends so it will be easier to attract the public. Listening to your audience’s opinions, remarks, and suggestions can also come in handy.
Keep in mind that in every problem, there is more than one solution. Thus, you should not limit your ways to the ones stated above.
Is Affiliate Marketing Dying?
Affiliate marketing is not dying. Sure, it went, and still is going through big changes. But to be honest, it probably won’t die or stop anytime soon.
But why do people continuously think that it’s dying?
Here are some reasons:
Income does not reach expectations.
The most common misconception about affiliate marketing is that it is easy to get rich by doing this (not helped by all those affiliate gurus flashing their sports cars!). Therefore, when a starting affiliate does not earn its expected income in a specific period of time, they immediately think that it’s not profitable.
However, this should not be the case. If you start affiliate marketing, patience is a must. You shouldn’t expect to be big overnight.
Affiliate marketing is becoming increasingly popular, so if you are going for an overcrowded niche it can be hard to get results. As a newbie affiliate, you may also be going up against those with over ten years in the business. Usually, this doesn’t end well and leads to people saying this way of doing business is dead.
Of course, with time and patience these affiliate marketers can learn, develop and compete. But many choose to cry foul and throw in the towel! Don’t be one of them!
What you should know, however, is that there are things that are dying. These are the old practices in the field. For example, simply renting ad spaces do not work as effective as advertising on social media platforms. Spamming affiliate links on the internet without much thought or value given used to work, but has died a death too!
So, Is Affiliate Marketing Dead?
Affiliate marketing is not dying, nor is it already dead. To prove this, let us let the numbers talk:
According to E-Marketing Hacks, Americans spent $4.21 billion, estimated, for affiliate marketed products in 2015. Moreover, it is projected to hit over $6 billion this year, 2020, and $8.2 billion in 2022.
E-Marketing Hacks also found out that affiliate programs generated more than 170 million transactions, with 5 billion clicks in affiliate links.
Rakuten Marketing’s study shows that 90% of companies see affiliate marketing as a crucial part of their business marketing.
These data points greatly support our claim about affiliate marketing being steady. One thing I can say is that you should try other affiliate programs apart from Amazon. There is a whole world of awesome affiliate programs out there these days!
In conclusion, affiliate marketing is not dying, dead, or even close to it. Based on all the statistical data given above, it is evident that instead of being close to extinction; it looks more like a growing business model with every passing day!
Affiliate marketing disappearing into the abyss is actually close to impossible. Perhaps, the better term to say is that its ways, processes, framework, and even the environment is different from what it used to be when it first boomed.