Everyone that knows affiliate marketing also recognises how much the channel has changed since its first seeds were sewn in the 1990s.
Affiliate is packed full of experienced heads; qualified enough to hark back to their version of the ‘glory days’. And while so much has changed around the publishers, agencies, networks and tech providers that have stuck with it through thick and thin, many are thriving under some considerably different conditions.
This week we’re fortunate to be calling on the services and experience of Tom Bryant, creator of MagicFreebies, who has reaped the rewards of spending some 20 years in affiliate marketing.
In our two-part series, we’re looking to Tom for a comparison of old and new, a chance to gauge opinion on some of the industry’s most pertinent topics as well as the impact that certain changes have had on running an affiliate business.
PI: Generating billions in revenue every year, affiliate marketing is a different beast to the one Tom would have met some 20 years ago. Strategies, technology and results have changed the face of the channel for good, while there is far greater control over how business is done.
Tom Bryant: There have been huge changes I’ve noticed in the affiliate industry over the past two decades.
When I first started out, it was like the wild West, or at least seemed that way. Loads of people were doing extremely questionable things and there wasn’t the sort of governance there is now.
Spammers could get away with sending millions of emails a day, non-incentive campaigns were incentivised under the radar by dishonest affiliates, while PPC affiliates were getting away with murder and blackhat SEO took place left, right and centre. This was back in the day where you could stuff thousands of keywords on your page in the same colour as your website’s background. I saw it all happen and couldn’t believe people were getting away with it.
The IAB had only really just started and tracking technology was pretty limited, allowing blind networks, masking and everything else like that to thrive. It was so hard for advertisers to see where and more importantly how their campaigns were being promoted. Users themselves were nowhere near as savvy as they are these days and the government had no idea how to police the fledgling technology.
That has all changed now. A few bad apples still pop up but they get caught so quickly there’s no incentive to act that way now.
Obviously it’s great that this has been cleaned up and advertisers aren’t running away from the affiliate model. It means more money for all the good actors. I think it did put a bad taste in a lot of advertisers’ mouths and how they viewed affiliates, but that mindset has shifted dramatically. You only have to look at the spend on the affiliate channel increasing year on year to see that for yourself.
Alongside that, affiliates have realised that in order to make any real money, you have to build websites and services that people actually want to use. That’s why some of the biggest affiliate sites are ones that give true utility to the user: cashback, voucher, price comparison and - dare I say it - freebie sites have experienced huge growth over the past 20 years.
Affiliates also have to be so flexible these days. Smartphone technology and social media, for example, have completely changed the way people browse and interact with the internet. The websites that have failed to optimise for mobile or build a strong social presence have suffered quite a bit already, but will continue to in the future.
Watching traffic grow, and the first steps after that...
PI: If there’s one thing that gets even our pulses racing at PI HQ, it’s a growing audience. We’ll admit that monitoring analytics is a tough habit to shake but one you can’t help but enjoy when the crowds flock in.
TB: I still remember the buzz of watching hundreds of people coming to the site every day back when I was a kid [Tom formed MagicFreebies at the age of 11]. It got to be a bit of a problem just refreshing the stats every five minutes to see if I was going to beat the previous day’s traffic.
There’s no doubt I’d definitely advise keeping an eye on numbers but “stat watching” can be very counter-productive. I’ve talked to loads of other guys in the industry who say the same thing and we all say it’s really hard to stop doing it.
Watching a website grow is a fantastic feeling but it definitely presents new challenges. Just managing a load of people coming to the site can be stressful. Luckily MagicFreebies is simple to use but we’re getting over 40,000 daily unique visitors to the site three or four days a week, and that means a lot of support is needed. It’s hard to imagine what those levels are like when you have people needing to contact you all the time.
Whatever site you have, to support your growth you will inevitably require staff, so you need to have a good handle on your finances. Having more visitors means having more costs, so if your margins are slim when you’re just starting out, you need to have plans in place if your website grows.
I’d also advise to iron out any creases your site may have before you grow. If you’ve got some horrible code that makes a form or function very resource-heavy, a huge influx of people is going to mean downtime and pages breaking. In both cases, you risk people migrating from your site and never coming back.
Obviously it takes time and resources to do and you just want to grow your website. Trust me, though, there’s nothing worse than having a website crash and break when you see stacks of people wanting to use it. It will cost you more in the long term not implementing those fixes now.
The use of social media
PI: The question of whether a modern-day affiliate needs social media remains unanswered. On one hand, there is the chance to broadcast to millions on networks like Twitter and Facebook, but affiliates that largely do the magic on-site might disagree over its genuine value.
TB: No doubt about it, social media is an incredibly effective platform for affiliates. Not only can you interact with your users and promote offers to them, you can also use it to grow your website. What is becoming increasingly difficult is getting the most out of your social channels without paying for it.
Since Facebook and Twitter floated, their main concern has been increasing their revenue per user. Since they’re both free to use, the only way to do that is to get websites and brands advertising.
Gone are the days on Facebook where you could write a post and all your fans would see it. Now you’re lucky if 5% of them do, and that number is just going to go down.
Social is a very tough one because you want to increase your fanbase, but when it’s so hard to reach them, your time could be better spent elsewhere.
The rise of incentive publishers...
PI: Cashback and voucher sites have grown to a position of dominance over the years. Few programmes have anything other than ‘incentive’ sites topping their list of contributors and it’s easy to see why. On hand to save money for shoppers around the world, their model is a cast-iron example of affiliates operating as a service to the people on their sites.
TB: The rise of cashback and incentive sites has been meteoric over the past 20 years. I can remember when cashback sites were starting to spring up. A lot of people and advertisers didn’t initially take them that seriously but they soon realised they were capable of doing a lot of volume.
We all know who the big players are in the incentive space and it’s insane how popular they have become. For a user they’re a no-brainer. Why wouldn’t you use a cashback site when you’re doing your shopping or moving into a new home and setting up utilities?
I think the two biggest questions are whether they provide incremental value to the advertiser, and are networks over reliant on them? I’m not extremely well-versed on their main arguments for providing additional value to brands but thousands of our visitors certainly shop at stores just because they offer more cashback than their competitors. If the brands are willing to pay out commission and have factored that in as a cost of business, it can’t do them any harm in getting more customers.
Having said that, I do think incentive sites can be seen as the easy way out for some networks.
If they get a new merchant or campaign then I imagine “just give it to the cashback guys and we’ll do the budget” is a common phrase to hear. The reason I think it’s unfortunate is that there are probably loads of smaller affiliates out there trying to grow and they’re being overlooked. If they even had a fraction of the attention that incentive sites receive, maybe they’d be able to flourish and grow into the ‘next big thing’.
Be sure to head to the site next week for Tom’s view on affiliate networks, site development, affiliate marketing’s ‘community’ and the future of the channel.