4 ms·

Curious - what is your bearish case for profitability of affiliate marketing?

by nextworddev 3y ago

p10_user 3y ago
people can find multiple ways to get to the same product. once your way starts charging they will find another way.
- dawalker 3y ago
  Is the implication here that you need to charge and users will leave you once you do? If you can make a product that's significantly better, then you should be able to charge. The thing I'd note for affiliate marketing as a business model is that for it to generate significant revenue, you need to have a lot of traffic while other business models can generate that much faster (subscriptions) or make you money based off of that traffic (ads) instead of how many products are purchased.
  - p10_user 3y ago
    Your note on affiliate marketing is what makes your first statement potentially unachievable. How does a consumer "know" that a product is significantly better to the point of "worth paying for"? There's always another free (potentially ad supported) affiliate marketer (or 5) around the corner. (Also considering the "worst" version of this "product" is an unskippable ad"). I don't know the solution
    - dawalker 3y ago
      Fair. The best solution we've seen is building the product in some way where it's somewhat defensible, either through data, features that bigger players won't build, etc. and then using a subscription based model if users are willing to pay for that and value the searches high enough or using an ads based model if you're optimizing for traffic rather than pure value on each search.
  - p10_user 3y ago
    I suppose two case studies worth exploring are: Consumer Reports (subscription magazine recurring revenue) NY times Wirecutter (a potential add on service to boost apparent value for subscribers)
    - qiongzhouh 3y ago
      We've looked a bit into CR and Wirecutter, not that deeply into CR yet though. I definitely used Wirecutter for a bit of things in the past, and they have a high level of trust that we'll need to seek to replicate.
robryan 3y ago
Over time affiliate programs like the Amazon one have become a lot less generous. On the other hand though from running an ecommerce site I'd be happy to work with an affiliate like this that isn't just a coupon website that basically adds no value.
- dawalker 3y ago
  That's what I've heard as well. Also, the lag to when you actually get paid is super painful. Also curious - how do you think about affiliates as someone who runs an ecommerce site? Are there any reservations about whether services like us take search traffic or ads revenue?

Curious - what is your bearish case for profitability of affiliate marketing?

p10_user 3y ago

people can find multiple ways to get to the same product. once your way starts charging they will find another way.

dawalker 3y ago
Is the implication here that you need to charge and users will leave you once you do? If you can make a product that's significantly better, then you should be able to charge. The thing I'd note for affiliate marketing as a business model is that for it to generate significant revenue, you need to have a lot of traffic while other business models can generate that much faster (subscriptions) or make you money based off of that traffic (ads) instead of how many products are purchased.
- p10_user 3y ago
  Your note on affiliate marketing is what makes your first statement potentially unachievable. How does a consumer "know" that a product is significantly better to the point of "worth paying for"? There's always another free (potentially ad supported) affiliate marketer (or 5) around the corner. (Also considering the "worst" version of this "product" is an unskippable ad"). I don't know the solution
  - dawalker 3y ago
    Fair. The best solution we've seen is building the product in some way where it's somewhat defensible, either through data, features that bigger players won't build, etc. and then using a subscription based model if users are willing to pay for that and value the searches high enough or using an ads based model if you're optimizing for traffic rather than pure value on each search.
- p10_user 3y ago
  I suppose two case studies worth exploring are: Consumer Reports (subscription magazine recurring revenue) NY times Wirecutter (a potential add on service to boost apparent value for subscribers)
  - qiongzhouh 3y ago
    We've looked a bit into CR and Wirecutter, not that deeply into CR yet though. I definitely used Wirecutter for a bit of things in the past, and they have a high level of trust that we'll need to seek to replicate.

robryan 3y ago

Over time affiliate programs like the Amazon one have become a lot less generous. On the other hand though from running an ecommerce site I'd be happy to work with an affiliate like this that isn't just a coupon website that basically adds no value.

dawalker 3y ago
That's what I've heard as well. Also, the lag to when you actually get paid is super painful. Also curious - how do you think about affiliates as someone who runs an ecommerce site? Are there any reservations about whether services like us take search traffic or ads revenue?