When the economic meltdown started hitting, everything you read from the affiliate marketing world is that it won’t effect us. The general mood was that somehow our little world would be immune from these pressures and everything would be fine. I took a much more realistic view though. There is just no way affiliate marketing could not take a hit when consumers take a more cautious stance with their money.
The bad economic news is starting to filter down to our industry. Google ad revenue is slowing due to weak demand, and some reports even claim that online shopping is “falling off a cliff” this year.
What does all this mean? If your affiliate marketing is product based, like many of the offers on CJ or Shareasale, that holiday crush of sales that is so dependable every year might be a speed bump this year. Margins will be tighter and conversions harder to come by. That doesn’t mean there is no money to be made during the holidays, but I don’t see it being as easy as previous years.
Of course the bright side is that CPCs should come down and that advertiser competition may be decreased in some niches. Also, certain CPA offers that are not product based may continue to do well. Things like debt consolidation, pay day loans, credit checks can increase in recessions. But to me the smart play is to have a wide range of offers to spread your risk across many niches. A mix of product, service, and free offers across different niches and networks can help weather the financial turmoil.
What do you think – am I being too pessimistic about the recession’s effect on affiliate marketing?
the shopping part I can understand, hmmmm but I doubt people will not leave their kids empty handed this year, but maybe smaller portioned gifts (if that makes sense) but debt offers and payday should be good as you stated.
It has affected affiliate marketers yes but I think more people will try and save in the US by no traveling. That way they can save gas and have things shipped from these online locations. With gas going down now I think that online sales might get affected but not enough to cry about. The internet is still growing at a rapid rate so we don’t have to worry about it to much. My opinion.
I guess time will tell. It might be the reversed. Most shoppers know there are better deals online then in the malls so people might turn to the net to save some money. I can see ebay doing really good this year.
What you will see I think forsure is marketers hitting up other countries other then the US. Not everybody is going g through a hard time. From what I know, Canada is doing good.
No, I don’t think you’re being pessimistic. You’re absolutely correct. I couldn’t believe that so many marketers were convinced that a recession wouldn’t affect affiliate sales. Hello? Money is money and if *any* time, now is a time when people are going to keep their wallets tight… Especially with discretionary online spending.
I caught on to the debt repair game early and that is going to be a huge market. I also thing free trials and things of the sort will continue to thrive, just because people still aren’t reading fine print.
I think you’re spot on with what you’ve said. Especially with product-based sales.
Survival of the fittest. Everything needs to be balances out once in a while. Everything will be effected because of this. Yes even affiliate marketing. Affiliates,Commisions,Campaigns are going to be watched closer, and the non profitable ones will be shut down. The Stronger Companies, and Affiliates will survive, but maybe with not as much money made. At the end of the day there will be less competition, and smaller payouts. Then it will start working its way back up to normal again. In the mean while we need to do what the companies are doing and watch our campaigns better.
The slow down has and will affect this industry, but nothing is ever as good, or as bad as it seems. I agree, diversify. Also, look at who you are targeting. People with lots of money still have money, and are buying online (at least in my experience). Lower middle class and middle class are not buying as much. Also, look at the regions; Texas, Oklahoma are doing great, Michigan, Ohio are not. There is still alot of money to be made and sometimes it takes a bit of suffering to get us to try something new.
I think we will not see the record numbers like we have the past few years over and over but you’re right there will still be buyers just not big buyers.
I’m pretty sure it will have some effect but overall I don’t think it’ll matter. Sure people might be travelling less but then they might be buying more tickets to movies instead. In depressions people often drink more alcohol and go out to movies (and similar things) more to “get away from the depression”.
So I think we’ll see a small shift in the purchasing patterns but I think the same amount of money will be spent.
Finally… never trust newspapers. They’re in the business of selling headlines. The “truth” has never been a part of their businessplan.
Hi Folks,
Recently I have found a very useful and attractive Affiliate program on Internet and I believe this is the Best Affiliate program on Internet.
Everybody can use, it’s so easy!! and the site consists of 9 Affiliate Programs all over.
It will all depend on the type of offer. Right now, McDonalds is doing quiet well. Cheap offers aim at the middle class will still do ok.
More indications holidays will not be so good, 1st decline in 23 years http://www.cnbc.com/id/27676922
I think your on the money Chad. Many people in the industry I know talk like the economy and current situation won’t effect them or affiliate marketers at all which I dissagree with. I think we have a huge advantage in being able to switch gears and promote just about any industry we please but we are kidding ourselves if we think we aren’t going to be effected at all.
Products sales will def feel the impact but so will lead generation eventually. Affiliates often forget that the leads we get paid for have to convert for the advertiser which means at some point the consumer has to open his wallet and take out his credit card. When consumers are more reluctant to do that it will trickle down and hurt lead quality which in turn will hurt even a pure lead generation affiliate marketer.
If you think about it logically, sure, sounds reasonable that product sales *should* decline.
Funny thing is, with all of this “economic downturn”, all of my product sales have INCREASED dramatically over the past couple of months
Nah. you’re ok with “pessimistic” your opinion! But, did you read Rich Dad, Poor Dad books?
In a world of financial-collapses it’s smart to never put all your eggs into one basket, and at the same time think positive.
I like to turn negatives into positives, and always look for problems because I like to deliver the solution.
If there were no problems in this world, there were no jobs, no activities, no solutions, nothing!
So I see this world-wide (financial) “crisis” as a blessing — what do you say about that?