The Future of Affiliate Marketing

It’s funny how most people see the affiliate marketing space as something independent of search. True, the ones who don’t fall into the “most” category are well aware of the benefits of the search industry to solid affiliate marketing. People like Jeremy Shoemaker (a.k.a. Shoemoney) and Rae Hoffman (a.k.a. Sugarrae) have taken advantage of this for years.

Affiliate marketing and paid search also share a lowly position in the marketing efforts of most Fortune 500 companies and largely for the same reason — it seems like a lot of work for a little return. Where they differ is most search people don’t mind that the large companies aren’t there raising the cost of clicks, whereas affiliate marketers would love them to enter the fray so they could have more well-branded products to market.

Affiliate marketing has had some major ups and downs in its relationship with search — like AdWords limiting the number that will be shown, or banning industries like gambling and adult that were always great sources of income. But there’s room for someone to revitalize the space and help return the profitability, while also making things easier for the entry of Fortune 500 vendors.

Proving how she is always in front of the curve on all things affiliate, Sugarrae wrote a great overview and best practices article on affiliate marketing that holds true today and suggested an idea I have had about improving the industry.

What I’m suggesting is an affiliate aggregator that goes beyond the collecting of programs for sites to sell and passes the burden of analysis to the publishers.

Now before everyone jumps at me saying “this is available” — it is in some small instances, but not thoroughly or throughout the industry, for that matter. Some ad network servers do this to a degree, and Google attempted it with their affiliate program. But a program that can rotate offers through a publisher’s site and determine the best conversion could create a definite improvement.

Then add the same thing on the vendors end — optimizing their offers and creatives to the various publishers — and the affiliate industry could be a major force for profits on the Web again.

It isn’t an easy undertaking, but it is something that Google could have done with all of their technology, if they hadn’t dropped their affiliate program. But the rub is, it really needs a middleman who wants to get seriously involved with both sides of the equation — a “Super Aggregator” if you will.

For maximum effectiveness, the aggregator would need to have the ability of AdSense to intuit the message on the publishers pages and combine the source of the traffic (search terms would impact on conversion as well as the message that brought them). They would also work with the vendors to find the best fit for their various offers, or work with them to develop better ones.

So you need great analytics, great marketing skills, great programming and great content production.

The process mirrors a lot of the work being done by successful affiliates already. But even they hit the wall when it comes to passing traffic to the vendor, and few are able to impact that side to improve landing pages and the sales funnel. They use the process of creating sites that convert — both as sales and well-ranked pages in the search engines.

The tips Sugarrae gives about succeeding as affiliate marketing evolves should be used: Understanding social media optimization and paying attention to traditional online channels are now very relevant tips. The importance of analytics has finally caught on, just as “Affiliates have to learn to become publishers of valuable web properties and then leverage those web properties to the max to create earnings” is fast becoming the affiliate’s mantra.

Now if we could get an analytics company to buy an affiliate aggregator, maybe the next challenge to AdSense could be created. Hey, given it represents 30 percent of Google’s revenue, a major competitor for publishers’ traffic could be interesting.

Chris Boggs Fires Back

Frank, this would be a noble effort and could certainly provide more structure in the sometimes incongruent world of affiliate marketing. I agree that this isn’t a primary tactic of many Fortune 500s, and it goes well beyond the solid reasons you point out around following the traffic. It almost seems like affiliate marketing is considered “dirty,” and that some people do it only because they have to, in order to compete in their space.

I have huge respect for affiliate marketers. They have long been succeeding in very competitive spaces on the organic side, even after Shari Thurow wrote in 2006 that “the reason many advertising and affiliate marketing agencies don’t like to focus on SEO is they don’t fully comprehend SEO and don’t know how to carry out an effective SEO campaign. Rather than admit their ignorance, they prefer to focus on online marketing strategies they claim to know well.”

As Danny Sullivan pointed out in a 2007 interview, “An in-house SEO talking about not needing to buy links might sound naïve to the affiliate SEO, who finds no one will link to their affiliate site. But the in-houser may have content that indeed makes purchasing links unnecessary.” The fact that many affiliate SEOs still have to use very aggressive methods to gain rankings probably hasn’t helped their reputation much.

As with other online marketing strategizing, the tools and skills outlined above are paramount to success. Don’t forget to add solid consumer insight (beyond trusting a content-matching technology) and a good lawyer to help with affiliate agreements.

Join us for Search Engine Strategies Toronto, June 8-10, 2009, at the Sheraton Centre Toronto.

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