Despite your best intentions, profitable niches and offers eventually die out. There is usually a common life cycle pattern I look for a niche in affiliate marketing.
- Offers come on the scene. The top affiliates are tipped off to them and start running the offer successfully.
- Word gets out, other affiliate pile on the offers.
- The PPC/Social market get saturated, bid prices go up.
- Margins decline.
- Fraud sets in. Merchants enact stricter terms and policies.
- Profitability further declines.
- Market fatigue sets in, consumers are less responsive to ads.
- Offer reaches a plateau, then a gradual decline until merchant cancels it.
So what can you do about this? Well, no one is immune to market forces so you have to learn to work with the pattern to succeed. Realizing where a niche is at in it’s life cycle is important. If you know you are early to the game you can use a more PPC centered, short ramp up approach. If you are late, it is less likely you will break into the market with PPC alone, so a more SEO favored approach might be in order. If you are early in the cycle, you can probably set up campaigns more quickly with looser rules. If you come in later it will probably take more time to work with the all the terms and conditions.
Planning ahead is important. Realize that you can’t focus too much in one area. Just like investing, its good to have a diversified portfolio of offers at various stages in their life cycle. Then when something declines or is canceled you have others running strong to take up the slack.
Great advice for any newcomer Chad.
[...] come on the scene Continued here: The life cycle of an affilia… Share and Enjoy: These icons link to social bookmarking sites where readers can share and [...]
Great points. Being first to market is always the best position to be in - not only will you get cheap clicks to do your keyword filtering, but you’ll have high CTR quickly as well, which will help you maintain those cheap clicks, even when others begin to saturate the market.
Great Advice as always.
However, there are certain niches that have been around for a long time and haven’t slowed down (within reason). These markets are obviously the hardest ones to crack…
~JV
Oh definitely there are exceptions. Some have a really long plateau phase where they probably are down from the initial bubble but stabilized.
I think there are also programs out there that are large enough that they aren’t effected by a particular niche. For example, the eBay Partner Network. How many hundreds of thousands of niches have people monetized from junk sold on eBay?
I currently make the bulk of my earnings through that and my niche is relatively new. But the interesting thing has been watching its Google Trends graph grow. I’m sure it will decline at some point, hopefully I’ll be diversified enough by then where it won’t matter and hopefully my dedicated group of users will ride out the storm.
Don’t put all your eggs in one basket.
chad
any ideas on an offer to promote for a site that i can coop with the webmaster that has a google page rank of 8 related to classic cars?
I am a ppc virgin and am a member of share a sale. pepperjam, and commission junction. Insurance?? Loans?
Thanks for your help
Zam
But chad that doesn’t mean you can’t break into a niche with an offer which is already established. Not sure if you’re trying discourage your visitors by saying “Too bad if you can’t make profit. Only the top affiliates are entitled to that”. I’m a mediocre affiliate with a full time job and I do well with any niche I decide to go into with whatever little time I have for aff. marketing.
Not saying that at all. Of course anyone at any time can break into any market with hard work. No one is entitled to anything in this game. I’m just saying there is a usual life cycle to any niche and there are certain points along that time line where its easier get in.
Chad,
From your experience how long is the “hot period” for an offer.
Is it more likely to be a year or 6 months?
Depends on the niche. If i can hold it out (that means offer doesn’t die), it can last 4-5 months before you get slapped but the offer usually dies before that or you are asked to stop sending traffic.
That’s exactly what happened to the Acai offers. Not only they are shady, rip off, blah blah… but also unethical because the customer gets raped very badly…
[...] are going to be attracted to. Break the mold, find a real niche and the cycle can be broken. The life cycle of an affiliate marketing niche Despite your best intentions, profitable niches and offers eventually die out. There is usually a [...]