Despite a number of initial preconceptions, affiliate marketing has bloomed into a multi-billion pound industry over the past two decades.
But with ever-growing competition from cashback providers, voucher code and comparison sites, is it still possible for small publishers to thrive?
Websites such as Groupon and Quidco, financed by commission earned from the advertiser, are dominating the affiliate marketing landscape, making it increasingly harder for small publishers to establish themselves. With these websites taking a large slice of the commission pie, enticing consumers with a proposition that cannot be matched, the future of smaller sites is up for debate.
There is also the question of whether advertisers will adopt multi-channel attribution. Although this approach rewards publishers - and many feel this could be an integral part of the future of affiliate marketing - for advertisers, making the move towards multi-channel attribution involves various complications, additional time and - in some cases - money.
The challenges that face smaller publishers have become hotly debated topics in the world of affiliate marketing, leaving many to ponder whether these sites will keep up or drop out altogether.
Finding a niche
Richard Greenwell, publisher development manager at affilinet, which works with advertisers such as Thomas Cook, Virgin Atlantic and Debenhams, told PerformanceIN that he feels there has always been a challenge for the one-man bands to succeed.
“Before the existence of cashback providers and voucher code sites, there were still other dominant affiliates in the marketplace. However, add to that the increased number of behavioural and retargeting companies which have come into the market since then and it makes the life of the one-man band harder than ever.”
Greenwell believes there is still a role for small publishers in the industry, given the right tools and support, stating that the key to success is finding a niche, understanding and growing your audience and considering a commercial proposition from the outset.
“Sourcing extra investment for any publisher can be hard, however increasingly there are new opportunities out there. Publishers should look at places such as Kickstarter and Crowdfunder as a good starting point.
“Creating fresh, original content is also the single most important factor when it comes to gaining high search engine visibility, which in turn will attract more of a following that will appeal to advertisers and other commercial partners.”
Jamie Harwood, head of UK Web Media, echoes Greenwells’ words, also arguing that all is not lost for one-man band publishers, believing that smaller sites have access to “a number of different opportunities” that didn't exist in the early 2000s.
But this certainly doesn’t mean plain sailing for affiliates that are just starting out. Harwood, who launched a successful affiliate marketing career in the confines of his bedroom, warns that when it comes to the ‘superaffiliates’, the cashback providers and voucher sites, trying to compete could be a recipe for disaster.
“The big guys are often able to negotiate top tiers from the start and leverage their established relationships and volumes to ensure a toe-to-toe battle would be fruitless”, he adds.
“Investment in our sector isn't easy to get. We have so many variables that can't be controlled from the start and as such prove to be a very long bet for many investors… Don't get me wrong, there is money out there and people are keen to invest. It's just they want to see a proven model, even at a smaller scale, which outlines route to market, size of market and ultimately how much can be made.”
Harwood insists that it is not all bleak for small publishers, remarking on the unique selling points of smaller businesses.
“It doesn't mean the one-man band doesn't have opportunity. The marketplace has got a little stale and there is still an opportunity to carve out niches.
“Many advertisers are looking at new ways to drive traffic and keen and ambitious one-man bands will no doubt become the new leaders in next generation marketing solutions, simply because the big guys will concentrate on what they know.”
Multi-channel attribution could also further aid the prospects of small publishers who are financially rewarded for every customer journey that results in a sale. The last-click model has worked well in the industry for a long time, but there is now a need for advertisers to better understand the customer journey and acknowledge which parties are contributing to a sale.
If attribution across various channels can show and distribute commission to publishers across various touch points, it can open doors to sites that will reach consumers at the crucial research stage of a purchase - a vital component for today’s new publishers.
And for those looking to start out in the industry, Harwood has a few fundamental pieces of advice for small publisher success.
“It boils down to three key things; find a niche you love, as in really feel passionate about, build something that's useful and wanted by the consumer, and don't aim too big from day one. I remember hoping that I could earn £5000 a year from affiliate marketing when I started!”
What do you think? Do one man band publishers still have a fighting chance in today’s climate? Comment below and share your thoughts with us.