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Online retailers can’t afford to ignore Affiliate marketing any more?

Discussion in 'Affiliate Programs' started by Bigal421, May 27, 2011.

  1. Bigal421

    Bigal421 Newbie

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    I am an marketing consultant for a medium-size online retailer and have spent gobs and gobs of time investigating funny traffic patterns that began appearing in 2008. I am hoping to piece together some more clues with some of your help. I suspect the bad economy was a catalyst for a shift within spyware/adware affiliate marketing. I have lots of interesting data... here are a few tidbits.

    I spliced together an Alexa chart for ?Daily Reach? that spans nearly 4 years and I attached it to this message post. I know for a fact that every one of the companies displayed on the graph has separate owners... some of them aren?t friendly to each other. I also have a catalog of invoice numbers from each of them, collected over time. The acceleration of Alexa traffic corresponds to an acceleration of actual order volume. However, the top performers are not getting the same quality of traffic. The ratio of real order counts versus ?Alexa reach? is not as strong as it used to be. I also have good evidence that all of the companies (with heavier traffic) have become increasingly profitable since 2008. 3 out of the 4 companies had nearly identical Alexa charts leading up to the end of 2008. I suspect they latched on to whatever the top guy (blue line) was doing.

    The bottom performer (green line) is the only one that hasn?t embraced affiliate marketing. Not only is their traffic less, but it has become very difficult for them to stay in business (they were making a killing in 2005-2008). Amazingly, a graph depicting their the drop in ?AdWords Conversion Rates? is nearly a reflection to the competitor?s Alexa charts.

    I just picked one industry as an example here... but I have seen similar patterns for other clients. The common denominator seems to be affiliate marketing.

    I am a certified AdWords specialist and I have access to confidential ?industry reports?. Another amazing coincidence (or not) is that fact that Google?s impressions have been rising heavily while the clicks have been steadily dropping. Of course, the avg. CPC continues to rise along side of the impressions. Again, these graphs line up closely to the Alexa charts.

    I tried blasting thousands of dollars worth of impressions with TrafficVance and MediaTraffic and wasn?t able to detect any blip on the Alexa chart. Whatever is causing this behavior is something else than traffic from 2 of the largest PPV players.

    I have more data too... but to keep this message post reasonable, I have a theory. Let?s see if anyone can poke holes in it or come up with a new explanation.

    Something changed with affiliate marketing at the end of 2008. Google?s servers are increasingly being used to generate search results, but spyware/adware is intercepting the clicks on a very large scale. Let?s say there are some big players with control over tons of PC?s. If they can prevent money from going to Google, it means more money is available to go to them. That explains why Google?s ?industry impressions? continue to rise and the clicks continue to fall. Because some companies are receiving semi-free traffic (with the affiliate?s help), they can afford to bid more on AdWords.

    I believe that any online retailer who isn?t willing to shell out commissions now days is doomed. It is hard to convince a client to start up an affiliate marketing program because there is sooo much cookie stuffing going on (which poaches on repeat business). How long does it take for affiliate marketing to pay off? I have never launched an affiliate marketing program before.


    Let me know what you guys think!
     

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