The Future of Affiliate Marketing
How do you foresee the affiliate business be in the future? Is it a reliable source of income? Yes/No. The answer is more difficult and less profitable, lets look at two major affiliates associates amazon(internationally) and Jumia (in Africa) to review this conclusion in detail.
If you have been an affiliate long enough, you will agree with me things are not as easy as it used be. More policies are being added which are unfavorable to the associate as a partner while the commission rates continue to reduce. Here are the top reasons why affiliate marketing could be treated as a short term business,
- Dwindling commission rates: the commission rates have reduced over the years even by half and in some scenarios some commodities attract zero percent commission. e.g. gift cards at amazon.
- Tight ever changing policies: online stores keep changing terms for the affiliate partners on a very regular basis. Failing to adhere to any of this policies have severe consequences including associate account closure. A number of amazon affiliates have had there accounts closed & lost thousands of dollars of earnings which is retained by amazon.
- App only and extremely promoted app installations: as is the case with Jumia, some offers are set to be only available to customers who have installed Jumia app and are purchasing through the app. Since commissions to affiliates are based on cookies stored in browsers, the affiliate looses commission when the customer switches to buy using the app instead of browser. Eventually, jumia will be incurring less expenditure on affiliates since most purchases will made from the app. That is good business for the enterprise but bad business for the affiliate.
- Competition with online advertising alternatives: businesses are preferring to invest more on CPM based advertising than to use affiliates. Adsense by Google and Media.net by Yahoo&Bing have sophisticated advertising platform which attract more investors.
As you can see, it is clear that as much as affiliate marketing is still paying your bills. The income will become less lucrative as time goes by, thus would call for more traffic to compensate the lower rates. A better solution is to find a service to sell online and create a customer base of your own. The customers you refer to amazon are there's, stated clearly on there TOS.
Diversifying by using both CPM based advertising and affiliate marketing could improve and sustain your earnings, though some pro affiliate marketers disguise even the best advertising agencies like adsense, claiming that affiliate marketing is much more profitable. My small experience has thought me to go with both, at least for now.