The Death of Affiliate Marketing on Google
Yesterday on a teleconference Amit Mehta announced the death of affiliate marketing as we know it, on Google. (MP3 is available to R-Club members.)
The days of “thin affiliates” brokering clicks on the Big G are over.
Amit has made millions of dollars as an affiliate marketer over the last 4 years and he’s one of the sharpest guys I know. He created “PPC Classroom” to train affiliates, very successfully, and he’s got a lot riding on this.
Nonetheless, yesterday he unflinchingly stated that “recess is over.” Google is slashing and burning affiliate accounts.
He pointed out that as of today, in some categories, the number of advertisers has gone from 50 to 5. The land has been cleared for people who create original products. A lucrative opportunity for content creators.
After the call I had a micro-panic attack: “Dang, does this make our Ultimate Guide to Google AdWords obsolete already?”
I quickly checked.
Sigh of relief. Uh, no. Not obsolete at all.
I remembered that what I’ve taught people about Affiliate Marketing and Google AdWords is NO different today than it was 7 years ago.
Which is:
If all you’re doing is slinging bits, you’re living on borrowed time.
If you don’t have a Unique Selling Proposition on the Internet, you’re roadkill sooner or later. It’s just a question of when.
Amit said: “If you’re a thin affiliate with no content of your own, you can hide, but they WILL find you sooner or later.”
I think Google’s “position” regarding affiliates is essentially the same as mine. Allow me to illustrate with a few stories:
1. Not long ago a woman manufactures a physical product that is very affiliate-compatible, and came to a 4-Man Intensive. She was considering a very lucrative offer from a “Super Affiliate” Maestro to launch her product into the affiliate stratosphere.
Upside: She could probably make about $10 million in the next year or so, if it goes well, and in my opinion it probably would go well.
Downside: The tsunami of affiliate activity, including spammers, quality score problems and false claims made by overzealous affiliates, would trash her brand. The gravy train would come to an end in 6-18 months.
And she’d be on the slag heap of rich people who have to start over from scratch if they want to have a long-term business.
I advised her against it. Take the high road, I said.
As of the last 60 days, Google may have saved her from considering the fast-burn plan.
I am NOT NOT NOT saying that affiliates are *inherently* bad or that affiliate marketing itself is obsolete. Affiliate Marketing will ALWAYS exist and skilled marketers will ALWAYS make money from it.
But Jonathan Mizel put it this way: “An affiliate promotion is not a career. It’s a test!”
2. A 20-something surfer dude named Chris Carpenter put Google AdWords on the map. You’ll never read about this in the Wall Street Journal…. but it is my professional opinion that “Google Cash” in 2003 and the firestorm of affiliate activity in the lowly “bizop world” was THE tipping point for Google AdWords. Suddenly every imaginable keyword was being bought up by affiliates and Google ads started multiplying like rabbits in Australia.
Every single vendor of virtually everything began to see that somebody else was advertising on their keywords. The gold rush began in earnest. This propelled Google past Yahoo/Overture and put billions in their coffers.
This only goes to show the enormous power of affiliate marketing. It’s here to stay. But the only way you can survive as an affiliate on Google now is to have a website with a lot of great, original content, and an email list.
If you’re gonna do that…. you might as well have original products too :^>
3. When Chris Carpenter’s Google Cash came out in 2003, I thought it was both the most ingenious and the most insane thing I’d ever heard of.
“Insane” was my first reaction.
It was an inherently unstable, easy-to-drone-and-clone business model. But later it occurred to me that it’s infinitely easier to switch affiliate products than to write and re-write a sales page for your own product – so maybe it wasn’t so dumb after all. Yes, Mr. Carpenter, it IS ingenious!
But shortly after that I recorded a now-famous MP3 called “Jet Fuel for Google Cash” in which I described how to go from foot-hold to toe-hold to strangle-hold, evolving from thin affiliate to thick product supplier.
In my opinion that’s the only stable path.
4. I never flogged my own affiliate program like I could have. I naturally resist making things sound easier than they actually are. I’ve never regretted that.
In many ways, affiliates put ME on the map and I’m grateful for that. But it happened naturally, because I had the best Value Per Visitor in my space. Not because I told people the way to make millions of dollars was to flog my products.
5. The other day on a Mastermind Call, a guy says to me, “I’ve got a day job. I’ve played around with a number of affiliate offers, I’ve built a bunch of Google campaigns and I’m pretty good at this. I want to go full time this year. What should I do?”
I said, “Drive across town to some rubber gasket manufacturer. Have lunch with the marketing manager and work out a deal with them where you generate leads for them and they pay you $25 per lead. What you will have created is your own private CPA program with zero competition. And you’ll never get Google Slapped. Put together 3-4 deals like that and you can easily quit your day job.”
Just this week, a guy named Kevin posted this comment on my blog:
“For the past 2 1/2 years, I’ve been writing copy and have been a PPC/SEO specialist for a local ad agency. I’ve passionately been tearing through your materials, learning direct response copywriting/marketing, joined PPC Classroom 2.0 (great program. I learned a ton, but got my google account shut off and really don’t have the budget to start off with PPC affiliate markeitng right now. Creative ad agencies pay crap.)
“I’ve had it. I’m fed up working at a creative ad agency where there’s no accountability. I’m the only one who can reduce my job to numbers. Nobody in creative thinks about generating leads(and like you said, we get clients by having a lady cold call all day!)
“Anyways, I’m now starting off as a local internet marketing consultant. It’s really amazing once you get out there and talk to some people. EVERY BUSINESS OWNER I TALK TO IS INTERESTED IN MY SERVICES! They don’t all buy, but everyone is interested. Business’s need help now! If you have these skills, and need to get going, then you’re doing a disservice by not getting out there and helping business owners.”
Amen, Kevin.
If you’ve got well-honed Google AdWords chops, you’ll NEVER go hungry. Amit will tell you that, Howie Jacobson will tell you that, and I’m telling you that.
Goals are in concrete, plans are in sand.
Major change of plans for some people, as of today. But the end result is the same:
If you’re original, if you have a great USP, if you know how to buy and convert traffic, the buyers of world will love you and you can write your own ticket. Students who’ve taken my advice on this have stable, secure businesses and comfortable incomes.
What are you waiting for?
One last thing: Here at Planet Perry we’ve been organizing a training program on how to earn six figures as a PPC consultant. Details to follow soon. If you wanna get on the notification list, enter your email address here:
Post your comments below…
About the Author
Entrepreneur Magazine says: "Perry Marshall is the #1 author and world's most-quoted consultant on Google Advertising. He has helped over 100,000 advertisers save literally billions of dollars in Adwords stupidity tax."
He is referenced across the Internet and by The Washington Post, USA Today, and the Chicago Tribune.
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I think the main problem with cpa and affiliate marketing is there are so many misnomers.
Many associate affiliate marketing with acai berry, slimy biz-opp offers that upsell customers into 10K plus coaching programs, or other price gouging continuity programs.
The truth is that affiliate marketing is so much broader than this. Affiliate marketing is no different from selling – without the face-to-face aspect.
Nobody mentions the several thousand affiliate programs for real bricks and mortar businesses..like pet stores, law firms, banks, learning services, books, media, and on and on.
There are over 2,000 offers in Commission Junction alone. Most of these companies are bricks and mortar businesses who have been established for years.
All the gurus are talking up the “Death” of affiliate marketing because of its scare/sex appeal.
However, there are still a mountain of affiliate marketers still continuing to sell for legitimate companies and still plenty of room for new affiliates.
Ben,
Amen to that.
Agreed, people who know what they’re doing will always sell affiliate products. Most successful affiliate business is done through mailing lists and not Adwords anyhow.
Ultimately, having your own niche products is more advantageous. Still, having traffic and a great product is only part of the equation. You still need to convert that traffic and relying on your own non-replicated sales page is another link in the chain where most people fail.
Yeah- I have noticed our book sales have dropped off quite a bit- we had a lot of affiliates selling them.
Awhile back – I saw the need to develop hard products so I tested and researched for 15 months came up with some breakthrough designs and have patents pending. We have a unique product so that gives us a market edge- still redesigning site but results are great so word of mouth is spreading fast.
Our latest customer just bumped his mileage up to almost 41 mpg (from 22) on his 09 Hyundai Genesis!
Good products, good service = good business, even on the internet.
The light bulb just lit up.
“Behold, I tell you a mystery. We shall not all fall asleep, but we will all be changed, in an instant, in the blink of an eye, at the last trumpet. For the trumpet will sound, the dead will be raised incorruptible, and we shall be changed.” 1 Cor 15:52-53
Perry – I am studying your Google Adwords and will definitely plow further in some direction. However, I am confused. I’ve been solicited by Ed OKeefe and Lloyd Irvin’s Silver Bullet to Internet Riches and they make it sound like if you just follow the model, you WILL make money. Is this direction a failing artform? Just want your input if possible. Then, I’ve gotten onto Justin Blake’s list somehow. Everyone is selling SOMETHING. What is REAL?? Lisa
Lloyd Irvin is razor sharp and Ed O’Keefe is too. Don’t know Justin Blake. I’m not familiar with this specific Silver Bullet program. Bottom line: Marketing processes are systematic and step by step. Developing a USP and a unique thumbprint in the marketplace is art.
Perry,
Agree with your last sentence … a very smart colleague/client of mine once called it “sculpting the ether” … little did he know that when he said that 15 years ago, he was being prophetic.
Many can peddle the system, or the science, but very few can create the art that it takes to be successful. That’s why this is not easy!
Even a USP … how many times did you rewrite or have you rewritten yours?
Dale A.
“Everything starts with Creative”
Google has been changing it’s business model over the past year because it realizes that there’s a ground swell growing among human visitors for searches that are rich in content information as opposed to middleman marketing aka affiliate marketing.
Being a long time entrepreneur myself I really don’t have anything against affiliate marketing, but we have to remember that in order to get paid we have to provide the customer with want they want and Google realizes this,which is why they’re putting more emphases on social media and original creative ideas.
I forgot to mention- my son is a very successful Affiliate marketer (7 figures a year) and he has seen the big drop off. But he has always worked on getting high quality scores and watches his metrics very closely- doesn’t deal with any bridge page type marketing.
His overall goal is not just good CTR but also Conversions for his clients (he has some of the highest conversion rates around) and his clients reward him with even higher commissions.
Results oriented marketing that results in actual commerce will always have a place.
He and I both see this as a huge opportunity – cull out the bad stuff- bolster the good.
Perry,
I’m that Kevin that left that comment! My heart was pounding when I starting reading your post, but when I saw that Perry Marshall quoted me, I almost lost it!
Every word I said is true.
I live in a small town 1/2 hour outside of Hartford CT and it seems like every small business owner I speak with is interested. (I actually have a call on my lunch break with a woman who owns a local yoga studio to see how I can help her.)
Perry keep up the great work. I love your writing, your wisdom, your encouragement, and your personality.
Put me down as the first to sign up for the 6 figure PPC consulting course.
Thank you,
Kevin
I’d like to get in touch with Kevin from the small town outside of Hartford to meet up for a beer and/or coffee. If there’s a way to make the connection here please get in touch.
Kevin, I’m right outside Hartford as well.
Please get back to me so we can talk. Maybe we can work together. I need an opportunity.
Thanks,
Anthony Luth
Thanks for that Perry – It’s good to hear these things from people doing it full time with focus, it helps cut down on the confusion when people with no experience start saying how it is.
Hey, Perry.
Quick question on the mechanics of generating leads for a local business. Of course, one might charge per lead form that is filled out. Are you aware of any good way to track leads that come in via phone?
Thanks for the great post!
J
Yes, unique phone numbers/extensions. Easy to do. Can be simple about it, or sophisticated.
Check out http://www.ifbyphone.com for a range of call very affordable tracking/routing capabilities. I am not affiliated with them.
Hey Perry,
Great article. It took me the longest time to understand what a USP really was and how important it is if you want to survive on the internet. It took even longer for me to come up with one of my own.
I also liked your point that “an affiliate promotion is not a career it’s a test” – Never thought of it before.
I enjoyed this post so much that I wrote a summary of it on my own blog for my readers – it’s located here: http://richard-theexprofessional.monetizemylife.com/is-affiliate-marketing-dead/
Have a great day!
Great Points!
I have always wondered how “tainted” any search engines keyword data base is for true search count volume, due to … what I would guess to be …
the huge number of online marketers – successful or not …
all digging deep into that golden long tail keyword their extensive kw research dug up.
I mean how possible could it be that much kw search number data, even for long tail buying keywords, has been seriously effected.
What if only 1000 IM’ers got the same kw idea in the same month and all search the same “buying kw’s” with absolutely no buying intention behind their – research – searches?
And this doesn’t even take into consideration the thousands of queries preformed by IM’ers searching kw’s for their individual/client side serp rankings.
I mean keyword identification tools all spit out the same basic results, right?
Now I have learned from Perry and others how to truly identify converting kw’s,
(which by the way, many small/medium business have no clue how to do and literally waste thousands of dollars without help
)
but this is something I have been wondering lately.
Hey, a little paranoia is healthy, right?
Regards,
B.
How does this affect the article marketers who are providing content… but who are also affiliate marketers with the same goal ?
Is Google screening and blocking content that is associated with affiliate marketing ? THX
Oversimplified answer:
Yes.
Love the stuff Perry. Spot on as usual.
I think the affiliate marketing field is simply becoming “more professional”, and over time will begin to model after professional offline sales positions (the real ones, where you actually have to interview several times for to get the job).
“If all you’re doing is slinging bits, you’re living on borrowed time.”
Great post! I hope your ideas become the mantra of Internet Marketing: provide value, be unique or get lost.
I get dozens of emails a day pushing the same products of the same regurgitated ideas pushed 5 years ago. I’m glad Google is ending this IM Nepotism. As you said, this opens the flood gates of opportunity for product creators and those of us that do create and offer value.
Thanks…Russ
Hey Perry,
Great article. It took me the longest time to understand what a USP really was and how important it is if you want to survive on the internet. It took even longer for me to come up with one of my own.
I also liked your point that “an affiliate promotion is not a career it’s a test” – Never thought of it before.
I enjoyed this post so much that I wrote a summary of it on my own blog for my readers – The link above in my name goes directly to the article.
Have a great day!
Interesting turn of events, but it only confuses me even more. I just read your Definitive Guide (I already studied copy-writing, even one on one with Gary Halbert and Joe Sugarman)my copy pulls well. I know about weight loss (former personal trainer) so I wrote a GREAT easy to lose weight book, TOTALLY original and a very long sales page (compared to the market)with a lot of good info in the sales page… So I go to Adwords with my new Adwords knowledge and they tell me my landing page (that converts 4% to sales from MSN organic traffic) is “poor” quality and I have to make significant changes?? I wrote and told them I get low returns, I have a ton of original content and could the specifically tell me what is “wrong” with my landing page (sales page)… they just said read the guidelines (I did and it’s perfect according to their guidelines)… So you can see how this news is even more confusing.
Kevin,
Weight loss is HYPER competitive, especially in broad keywords. In Glenn Livingston’s Hyper Responsive club he shows how he got good QS’s and a great start going into a sub niche of weight loss. You can take the adwords concepts and use them in Bing and Yahoo; Google will not give you any useful advice on this. You can use Glenn’s approach and you can advertise in all kinds of other places.
I hear you Perry, but it still confuses me… I just don’t get the logic…..They say they want original content, I give it to them, and they tell me it’s low quality, even though it meets their own guidlines to a “T”?? It’s just confusing… and yes I will take my business over to yahoo and bing… I was just so pumped up after reading your 2010 Definitive Guide to Adwords. I already deleted my ads from Google (they weren’t running anyway).
Kevin,
The problem is, you’re in the most hyper-competitive topic there is. I’m not saying it can’t work, you just have to take a very fine-grained approach to the problem. Some keywords you will do fine with good QS, others you could fight for the rest of your life.
“Some keywords you will do fine with good QS”
I guess I have to read up more on Quality Score because I am missing something in your reply. I used about 50 different keywords and some of them were very fine grained (to the point of not even expecting much traffic from them) and NONE of them had a good quality score.
I realize this isn’t the place for coaching, so I won’t comment further. I appreciate your input, even if I don’t “get it”.
Ive had success with adwords for several campaigns and ive been ebaying for years. Ive always sold physical products and just recently introduced a couple of info reports and tutorials.
I only offer affiliate products from within my emails lists well away from google’s slap and the most popular physical products ive sold have eventually been replaced with my own version of the product. I actually sell a report on this from my website which helps ebayers introduce their own products but it also realates to products sold anywhere online and offline. So instead of offering links to affiliate products you can actually sell physical products for other producers. Then replicate and better those successful products with your own product. Im still working with adwords and other marketing media and it is a goal of mine to become a consultant but I want to be sure I can succeed in hyper competetive expensive markets as well as the lower hanging fruit markets although those markets do still exist and up for the taking. It seems I am able to manage multiple markets simply selling my own products building income stream upon income stream and I feel the consulting business would become a full time pursuit. Does this sound familliar?
If we have content..like a weightloss article, that send traffic to a website that has reviews of weightloss products like: http://www.bestcriticreview.com/weightloss
and a blog http://www.bestcriticreview.com
Is this model dead ?
Pretty much, yes.
Thanks for a very informative article. Not been very successfull with adwords. just recently got a new software that works great, but the results have been/ are slim.
Even sites like Squidoo are banning topics that are affiliate heavy and bound to be spammed. So I guess we are back to square one…. find the right offer!
Definitely agree, a couple years straight I was making a killing putting up mini-sites with Clickbank product on Adwords, now I only have a few of those campaigns still up..built a good list though!
Do you use other methods of advertising, like CPV and the PPC engines?
I think you should use every method available to you, and fine some you enjoy doing.
Affiliate marketing isn’t dead.
Affiliate marketing for dreamers who buy “simple, easy, and extremely profitable” is dead!
It’s dead on Google Adwords (and probably will be on Yahoo Search Marketing and MS AdCenter very shortly.)
Long live “complex, difficult, disciplined and effective.” Long live Perry!
All the best from one of your oldest customers.
Jack
Great to hear from you, Jack. And my salutations to all who choose the high road, the road less traveled. It makes all the difference.
Long live the hard workers who go slow and steady; not get rich quick. In the end, it’s well worth the investment!
Great article Perry! I have several affiliate websites, many built using black hat techniques, many using articles and mini nets and they are dropping like flies! And believe it or not, I’m happy.
There are some incredibly smart affiliate marketers out there and they will continue to make great money, but there is a new bread of marketer rising and they are going to blaze a new trail, developing unique and wonderful products, offering internet marketing services and this is the gang I want to join.
Linden
PS Really looking forward to your 6 figure PPC consultant program.
I was on this call yesterday, Perry, and I thought it was pretty earthshaking to the little “guy” (I’m a female) trying to make money on affiliate programs. Too bad for some who WEREN’T listening yesterday cuz there’s a great opportunity for those who were on the call and also “get it”.
How does this affect promoting a multi-level product? Like people who are using Adwords to promote their replicated mlm sites? Are they getting banned, too? I would think so since it would also be considered duplicate content.
Your thoughts on this?
Thanks for sharing your valuable content,
Replicated MLM sites = bad. don’t touch ‘em with a 10 foot pole.
Feels nice to be on the winning side. I started developing my own products some time back. I heeded the warnings when I first bought the Def Guide to Adwords. Thanks Prophet Perry!
Way over the top post. Can’t believe the amount of free information you have given me. Now I’ve got ammunition for what the future holds.
Hi Perry,
Since a couple of years I’m doing affiliate promotions on Google AdWords. I aleady learned that this isn’t the only horse one should bet on.
I started with promoting products of more than 10 merchants. After applying the 80/20 rule on them I could reduce it to two merchants as they where the only profitable ones.
The funny thing is that the merchant which product makes me the most money got it’s own AdWord account banned and I still can promote his products via AdWords. It is earning me some nice extra money but I know I would be stupid to rely just on that. I keep it going until it’s over. Just as easy as that.
My focus now lies on unique quality content with a own voice.
Hi Perry
Great advice as always. This paragraph -
“Drive across town to some rubber gasket manufacturer. Have lunch with the marketing manager and work out a deal with them where you generate leads for them and they pay you $25 per lead. What you will have created is your own private CPA program with zero competition. And you’ll never get Google Slapped. Put together 3-4 deals like that and you can easily quit your day job.”
…is the perfect antidote to falling affiliate commissions for anyone with even a small amount of Adwords or Im knowledge.
There’s a few issues to sort out with tracking and getting paid with models like this, but it’s well worth the effort because the upside is so huge. It’s good for the client, good for the economy, and good for us.
Thanks for the reminder.
Warm regards
Rocky
Hi Perry,
Having worked as an affiliate marketer since 1997, I’ve watched many of the ‘bit slingers’ fall by the wayside and go back to to day jobs, while my revenues have continued to increase year by year.
Direct linking from Google Adwords might have been a lucrative proposition for some over the short term that it lasted, but those affiliates interested in building ‘real’ businesses could see that it was not a sustainable model.
Anyone doing business on the net needs to build their own list of leads, even affiliates without products. Sending traffic direct to the merchant for a one-time quick sale is (and always has been) a waste of money to me. Give me the lead and I’ll work it to make 5 or more sales of products relevant to their interests.
Your suggestion that these failed PPC affiliates should use their Adwords prowess locally is a good one. On the other hand, they could always try to drive traffic to real review sites too.
Cheers,
Ros
Thanks Perry for the heads up.
who is leaving the pack onto the ‘high road’.
Looking always to broaden my value to the world, it looks as though you may have made a sale to one marketer
All your posts are full of wisdom.
I was one in the past that did know how to use Adwords and lost the proverbial shirt. I’ve steered clear because of that, but I am seeing a glimmer of hope here.
I have to agree with everything you say here Perry. I saw this coming about three months ago and I think Google finally got fed up with flogs, rebills, farticles, and everything the CPA networks were putting up.
There are many culprits involved such as the shady affiliates who used images of celebrities such as Oprah to dupe people into getting into hese shady rebills offers.
But a large portion of the blame should also be placed on the CPA networks who turned a blind eye to the agressive and unethical promotions that there affiliates were doing.
Now everyone has been hit including the *ethical* and *honest* affiliate marketers.
Cheers
Gauher
An unfortunate thing, eh? The evolution continues….
Hi, Perry!
Great post – you could just as easily have refered to the death of Internet marketing, not just PPC Affiliate marketing. Throwing some slm e-book online or grabbing an affiliate link & firng it out using canned copy just doesn’t cut it anymore.
What does work, for sales or affiliate promotions, is a quality free download followed up by an atoresponder series on the same topic, and sending AdWords traffic to your free download will never be a problem.
Done right, that followup e-course gves you time to prove your expertise and show your recommendations should be followed and gives you numerous opportnities to promote the affiliate offer and other related offers.
Takes more time, but makes more money. Funny how that works…
Hi Perry
Thankyou for your invitation to the Google Slap teleseminar – it was quite an eye opener. I had noticed that it had suddenly become difficult to get some of my old adverts to show on adwords, so have had to react quickly. Your advice was very informative and helpful to me and I am certainly glad that I took the time to listen to what you and Amid had to convey
Thanks heaps
Mark garnham
Hi Perry,
Let me begin by saying I’ve been a big fan since I bought your Google Adwords course about a year and a half ago but let me get straight to reason why I’m writing.
My partner and I own a company that manufactures over 150 all natural health, beauty & spa products. We use absolutely no chemicals, preservatives or synthetic additives of any kind in our products and as I’m sure you are well aware of, consumers are getting tired of using products laced with toxic chemicals and are looking for more natural and healthier lifestyle.
For the past 8 years we’ve been marketing our products through home spa parties which you can see on our retail website, http://www.BayBayz.com, but we are looking at the Internet as a vehicle to get us to the next level of production.
The challenge we are running into is that there are a million other products on the market all claiming they are the best but we know the quality of our products from the thousands of testimonials we receive every month.
We also understand that in order for our products to sell, customers have to see and feel their quality before they buy and when they do, then the products sell themselves, which is why our spa parties have been so effective but at the same time makes Internet marketing challenging. It can take years to build as solid direct sales force and their comes a time when you have to bring in good people to get to the next level and that’s were we are at now.
Recently we’ve shifted gears offering private labeling services for business owners who can sell our products under there own, private brand name which has been one of the most positive things we’ve done since we began.
We feel we have found a niche by offering no minimal orders and no investment other than their wholesale price of the products they purchase, shipping and applicable taxes. We even design their labels as an additional free service offered to all our clients.
Saying that, I believe our product lines would be perfect for an affiliate program but we have no idea how to begin to put it together.
Manufacturing great products we know, Internet marketing we don’t
Can you help us?
Thank you for your time Perry
Terry O’Connor
http://www.AguaNaturals.com
So…this this mean I need to stop promoting affliate marketing via any means? And should I start concentrating on a different business model or on my own products?
BTW…if this is all true I can foresee a huge turn In the IM world, like a Mack truck on a busy highway!
Paul,
You can promote affiliate marketing ANY WAY YOU WANT TO. But Google doesn’t like it. Especially when it’s just bitslinging.
I think you should change the title to “The Death of Affiliate Marketing on Google if you promote things they don’t like”. That would be a bit more accurate.
Every single affiliate I’ve talked to has said they’ve done a rebill offer or had a flog running or they promoted a google biz opp offer in the past. They said they were told to stop, (in Google’s way of giving you a really bad quality score), but their account wasn’t banned.
Now Google has just taken a different stance. In the past it was “please stop doing this, but you can keep your account”. Now it’s “you did this in the past, we don’t want you here anymore.”
It’s widely known that Amit made very good money promoting registry cleaner offers on Adwords. Now Google doesn’t like those and they don’t want any accounts that ran those offers in the past. There’s always more to the story then we get.
Affiliate marketing isn’t going anywhere. Affiliates will adapt. They know that the only constant they have in their business is change. You adapt or die. Even if Google continues narrowing the list of allowable offers to promote, who cares? There are so many other traffic sources out there. There are also so many other ppc engines to use.
Plus who knows, google may change their mind tomorrow and allow all those offers again if they see their share price start to drop too much. They’ve got shareholders to answer to and no shareholder likes to see profits drop. They’ve got to walk a fine line between keeping users happy, so they’ll continue clicking the ads and keeping shareholders happy with solid profits.
There’s life outside of adwords and now more and more affiliates will move to yahoo/msn and all the other second tier ppc engines.
Affiliate marketing on infoproducts is growing in The Netherlands, but far, far from what it is in the US. I am at several lists and must say everybody is pumping around the same stuff… Sometimes you can get a free e-book here and there, but it is a pity that it is that low quality, that I unsubscribe immediately.
I can understand that Google wants to and needs to support the content creators in stead of the ones who are able to set up just a little bit smarter campaign, spending more time in tweeking the campaign than creating quality products.
I hope that Google has found the grail on how to support the content creators before here the affiliate wave is getting huge.
Thanks for sharing!
Tom Zoethout,
The Netherlands.
Wow there is so much I could say about this topic because Google have affected my account as well. I not an expert on Google Adwords but with my directions of real content sites that provide value and usability, I hope to one day have success from affiliate marketing.
…..I really hope its not the end of affiliate cause my solid gold pocket watch site would truly break my heart.
Hey Perry,
Thanks for the informative article. I already knew about a year ago that the direct linking affiliate campaigns will sooner or later all be scrapped from Google, as they are literally destroying the versatility of Google Adwords.
Now that the big slaps has finally begun, I cannot tell you how glad I am, now there are actually some space open for new honest marketers like me who actually build unique websites
When is your 2010 Ultimate Guide to Google AdWords going to be release. I see it available for pre sale on Amazon. Do you have a .PDF format. I am from India so if I buy a book it will take at least 30 days to reach me. I would like to read your book ASAP.
Is there a way. Please email me. I am interested in your book.
Deepak,
If you want PDF you should purchase the Definitive Guide http://www.perrymarshall.com/adwords. Thanks-
Perry
Excellent post, Perry! It’s also good for affiliate marketers to know what else is out there besides the Big G. But, yeah, they crane-kicked a flood of affiliates in the nuts. I look forward to your PPC consultant program
Perry,
I have always listened to your advice. You know what you are talking about. When I came across your idea about talking to business owners and asking them to pay you for leads, all I thought was “Wow, why have I never thought of this”.
Especially in obscure niches such as “rubber gaskets”. Like whaaaat?
I work for myself and I am an affiliate marketer. I don’t have the funds to run PPC, so now I focus on free traffic. This post was very informative and I like that you show that affiliate marketing is not dead…if you steer your own course and focus on your goals.
A plan can always be changed, which is why you say it is in sand. A goal is something that you must work to, this is why it is concrete.
Every time I read one of your posts, I get a boost of confidence. I am new to your blog but will read on a regular basis now.
Thank you for everything and much more to come,
Anthony Luth
Perry,
This article has hit home for us. We had a phenomenal adwords campaign running for over a year with overall quality scores of 7 or 8 /10 for 100+ keywords we were targeting. Just recently out of nowhere we got Google slapped and Google knocked our Landing Page Quality Scores all to 1/10 effectively killing our campaigns.
Our landing pages were quality lists of products (“Top 5 x”, “Best 10 products for x”) that utilized affiliate links to refer users to buy them. Do you think since we were using affiliate links and didn’t have an actual product that is why we got slapped?
With Adwords out now I am thinking we will try creating free reports, obtaining targeted email addresses, then going from there…
Using aff links and not having an actual product is a good way to get slapped….
I did not want to listen to Amit’s call because I did not want to hear what I knew he was going to say.
What a blow?
Google is indeed feeling cocky lately.
Thanks Perry.
Great post Perry. I have always liked the affiliate model for the backend sales… seems thats where it started and will liley remain. Sell your own product on the front end, and monetize your list with affiliate offers.
Quick question though (if you have a product that explains this show me the link and Im on it)… I am starting to read about people getting spanked by Google because of just landing pages that capture emails.
This is a little scary. I have my own products (software) and I use info products as lead generators (free reports, etc) to then teach them why they need my software… so am I at risk of getting a slap?
I can understand their position on the get rich scams, and maybe the clickthrough affiliate pages… but what about people that are selling a product but are in competitive niches where we absolutely MUST get their email in order to play the game at all?
Best,
John
The rumor that Google penalizes you for collecting email has been around for years. It’s not really true. And if you squeeze it doesn’t have to be a “hard” squeeze.
Very informative post. I don’t think affiliate marketing will ever die, but there are some ways that folks need to go about their marketing in order for it to stay alive. I’ll have to bookmark this one to pass on to my network. Thanks for sharing!
Great Post, Perry! I am very interested in the “Google bannings for life”, mainly because I happen to be one of those who have been on the receiving end. Even today, I still don’t know why I was banned – still s&@% happens. I would like to know if there is any way that a person such as myself can ever re-open another account with Google in order to try and carry on my online business? Is there any way around this problem, since in spite of everyone’s opinions that we can use other SE’s and other traffic generation methods, Google is STILL # 1! I’d love to hear you comments,
Regards John
John,
You have enter the Witness Protection program and open an account with a different computer and IP address and identity.
Thanks Perry, I like a guy with a sense of humour. Ah well, “cest la vie!”,
keep up the good work
regards
John
So, What’s your suggestion??
Focus on physical products instead of digital product?
I feel a bit down after reading this posting.
But there must be a way to counter this problem.
Some of the biggest affiliate sites are still allowed to advertise on Google, like the big shopping comparison websites. Why is that I wonder?
If you have a small website wanting to promote products as an affiliate you are going to have your account banned sooner or later.
The idea behind search “trends” and search “predictions” has a fatal flaw. Most authors just look at “demand” side and fail to look at the supply side of prediction or trend. Without looking at the supply, or “results” side, predictions are just guesses or throwing darts at a board. We study search demand/supply trends from around the world to find profitable niches and products, and the main problem with predictions is that no one looks at the “supply” side to these predictions. A niche, or hot predictions, is not just a demand side issue, but a supply/demand curve. If you predict IPHONE apps will take off, and there are already 100,000 aps, then you aren’t going to hit that one. If you see that demand for cell phone radiation shields is going nuts and there are only two suppliers, then you can be pretty sure that it will be a good year for those 2 supplies. The software at http://www.TheInternetTimeMachine.com studies both the demand (search volume) and supply (think “results” in Google). The Google Phone is generating much more buzz right now then say the Apple Tablet.
Cheers,
Curt
Here is a video on what I mean.. http://bit.ly/SupplyDemandCurves
Gracias por la informacion pero no me queda muy claro si es el momento de buscar nuevas opciones
Meixco DF
Sorry to be the bearer of bad news but affiliate marketing, as it currently exists, is dying and will be dead before long.
The reason is not Google or Twitter slaps but more fundamental. Affiliate marketing is an integral part of the sales-push economy which is being replaced by the demand-pull economy. This transition is accelerating.
What is sales-push? It is the idea that the best way to sell is to target the right customers, at the right time with the right products. I know it sounds almost ludicrous to think that somehow this fundamental marketing premise will cease to apply. But that is exactly what is going to happen, is happening right now.
So what is demand-pull? Until recently this was hard to understand. But it is about creating channels where consumers and suppliers exchange information on equal terms without the distortions of sales copy or advertising.
A good example of such a direct channel is called the Customer Satisfaction Monitor – http://www.customersatisfactionmonitor.com
Check out their affiliate program which is probably indicative of how affiliate marketing fits in the demand-pull economy.
David,
You are flat out crazy. Those terms are just semantics. What or who creates “demand” copywriters. This sounds like marxist propaganda.
Kevin,
I have to agree with you. Sorry David, what you say has nothing to do with affiliate marketing as such but the way you market the product you’re affiliated with. This is a big difference.
Affiliation means that you connect with another organization or become a member of it.
So even if you would be a freelancer specialized in selling cars and you connect with a certain brand, then you would be an affiliate. If you good at it you sell cars and get your cut. Period. This would be affiliate marketing as well.
The longer I think about it the more BS I think it is to say that affiliate marketing is death.
There may be some ways of promoting that are death ends, but anyway affiliate marketing is just selling stuff on commission base. It isn’t death and never will be. Otherwise you would state that there are no commission based sales anymore anywhere.
Sorry for any typos I’m far from native.
Kevin,
Crazy marxist, never been called that before. I can assure you that I am a card-carrying capitalist, enjoy a good cigar with cognac and dream of one day upgrading my Porsche to a Lamborghini. LOL.
I understand what I am suggesting is painful to hear and yes sounding even crazy, particularly if you have been building an online business, had some success and banking on more of the same.
Think of what happened to all the Mom & Pop stores after Cosco and Walmart came along and streamlined supply and distribution. Same thing here.
It’s simple economics. It will be cheaper, easier and safer (think of FTC regulation) for product suppliers to go through direct channels than try and chase customers through indirect channels. For instance, a supplier who is paying 40%-70% of the purchase price as commission will have to compete with a supplier who is paying just a fraction of that for a more efficient form of distribution.
Demand is not going to come from copywriters. This worked when the suppliers controlled both the media and the message. Consumers are now in control and the iPAD is a good example of how demand will arise naturally and, to some extent, spontaneously. Bloggers review a product, social networks spread the message and potential customers will go to a direct channel to purchase.
How is this different from how things happen now? Below is a good, if a little simplistic, summary.
http://www.customersatisfactionmonitor.com/index.php?p=stat&node=crm-evolution
In terms of push vs pull check out. Although I believe that their definition of “pull” is not quite right.
http://www.customerthink.com/forum/push_vs_pull_crm
Bottom line there is a major shift coming, just about everyone acknowledges this to be the case. Of course, it is almost impossible to try and predict how it will all come together. But now is the time to the thinking, the planning and preparing for the new opportunities. To think it will be more of the same is plain crazy. (Sorry couldn’t resist.)
David,
It’s not painful, because I can’t even come close to buying your premise.
Mom & Pop stores are still out there doing well. It was more of the middle size that got sucked in by the big discount stores. But the big discount stores are not nimble, they cannot react as quickly to market demand…They will only carry something once the product is past the growth phase and into the plateau phase.
Also, last time I checked both Walmart and Costco offer affiliate commissions…what? LOL…
Here’s the bottom line. Human nature. If a company can pay someone to make a sale for them that they would not make on thier own, and they can even make a little profit, they’re going to do it.
There will always be room for an affiliate marketer or sales person. Costco and Wallmart actually depend on it. If there were no growth phase, both Coscto and Wallmart would have no products to sell. You don’t buy in giant lot sizes unless you know you’re going to move the product, and you don’t move the product unless there is demand, and there isn’t demand if sales people and affiliates to create it. EVEN with the I-stuff. However, I will concede that Apple spends A LOT of money in house on advertising.
Also, you mentioned that people would blog about a new product…yes, some will, but I believe if you check out all the blogs, you will find a HUGE majority of them are reviewing the product for the purpose of selling it. Take away the incentive for them to earn money reviewing it and the reviews die, then sales die. No grwoth phase, no plateau phase.
It’s really just common sense.
Kevin and Mario, why do you think Google, Twitter et al are slashing and burning thin affiliates? Why do you think the FTC ramping up their legislative efforts to stamp out deceptive practices?
I know the simple answer is to weed out the bad apples. But it is more than that. All affiliate selling practices that are making solid money are based on withholding information and manipulating desires. It is about making a sale rather than providing information to make an informed purchase decision.
If it was otherwise, every affiliate landing page would be exactly like the product description page of the provider.
The game is up. Research is showing that people are increasingly becoming vocal about deceptive selling practices, they are ignoring advertising and hounding governments. This is why Google etc. are panicking because it undermines their business model which is based on delivering solid information. If it was otherwise they would love to have all those affiliate landing pages on their front page.
I know there are bloggers who do provide solid information and make a little money on the side through affiliate programs. They, unfortunately, will be caught in the crossfire.
The other nail in the coffin of affiliate marketing is the growing complexity. Amazon recently closed all Colorado Associate accounts because of a tax law. This may be a one-off, may be not but I suspect this is a glimpse of the future of affiliate marketing – a simple email saying your account has been closed, bugger off.
So in summary – Deceptive sales practices will no longer be tolerated. How do you define a deceptive sales practice? In reality, it is a fine line so Google etc will simply tar the whole of affiliate marketing with the same brush. Affiliate managers have to weigh up the cost of maintaining affiliate programs against the threat of being hounded by the FTC because of just ONE rogue affiliate. They will also have increasingly deal with governments desperately seeking tax revenue. I suspect they are just going to conclude, as Amazon has done in Colorado, it is just too hard.
And coming back to my original point – this creates demand for a new distribution channel and a new model which connects consumers with suppliers more directly. This model will emerge and, to be frank, I am not sure how affiliates will fit into this model but it will not be as it currently stands. This model is dead as a dodo.
David,
Google started thier “affiliate thinning” becauase they were CYA’s from litigation resulting from people using Google’s name in thier affiliate products.
The FTC is on a Marxist path and is looking to regulate every aspect of life, so they can’t stand that all this money is changing hands over the internet and they aren’t getting a piece of it. THAT is why THEY are regulating it.
I will give you one point, in that, Google is about quality experience for thier end user (the searcher) which is why they got firm with the whole affiliate duplication concept. That isn’t a good experiecne for a searcher and they first and foremost are in the business of providing quality searches.
But as far as you premise on changing sales and distribution models, I’m sorry, your explanations just aren’t compelling.
My background (from college) is as a molecular biologist and in science there is a phrase used called Occam’s razor: http://en.wikipedia.org/wiki/Occam's_razor
Your premise doesn’t observe Occam’s razor.
Perry,
I may be wrong, but my feeling is that PPC has never been a good alternative to list-marketing of affiliate products. Folks buy from those they have a feeling of trust in. Always seemed a bit cold bouncing from an adwords ad directly to a sales page! Hell, the vendor could have been an axe murderer! lol
Taking the time to build a solid relationship with subscribers will yield results for a long time….and nobody will cancel your account!
An email list with a good relationship with the source is THE highest quality traffic source online, period. PPC traffic doesn’t even come close. A great email list is the holy grail – it’s what you should attempt to build with PPC. People with a relationship are literally 100X more likely to buy than those with none.
‘Devil’s Advocate’
Perry – I would like to play Devil’s Advocate with you here on Adwords.
I am not attacking you, but I have to say I am skeptical that any money can be made from adwords – especially after one’s own billable time / the cost of a pro is taken into account.
Aren’t people just plain fed up with being sold when they click adwords – and being trained into blinkering themselves solely to organic search?
Research shows that less people are looking at words now as a percentage of all search.
I cannot remember the last ime i clicked on google ad and i am sure many people feel the same way.
I want ‘no axe to grind’ CONTENT – not a pitch fest when I click!
After all – it is effectively highest bidder pays, and the ONLY way they can justify that spend is to squeeze page / special offer / upsell you otherwise they will just bail out OR ramp up the hyperbole.
It seems to me it is a self levelling playing field and that as soon as ten ads fill up page one, it then becomes impossible to make money as google have caused the advertisers to reach a cost ceiling.
I think it MAY be possible to make money with a tiny niche like mine where I have physical / e products with no real competitors – I have a strong USP and reputation in my market.
But for anyone else I simply do not see how it is possible. Makbe you can prove me wrong with some hyperbole free real results from anyone bigger than a tiny sub niche – or is adwords only FOR tiny sub niches?
And I certainly do NOT agree that you should be suggesting people run their own ad campaigns – it is such a sensitive, huge, complex control panel that it cannot in my view be operated part time.
I think this is akin to encouraging people to waste their own time and money – something you have a moral obligation to guard against in my opinion.
Like playing the violin, you would sound awful if you dabbled at it, and I would do my accounts awfully and with so many costly mistakes if I did them myself – that’s what we pay professionals for.
So the question is – can a tiny sub niche make enough money to hire a pro, and can even a pro crack the profit combination to a competitive adword even with a great product/service.
And if so, how many weeks before they are priced out of that profit opportunity and go back to zero again?
Your thoughts, sir?
Nic,
you said: “I have to say I am skeptical that any money can be made from adwords – especially after one’s own billable time / the cost of a pro is taken into account.”
If that’s true, then why don’t you go ask some people who got banned from AdWords why they’re so mad.
AdWords is a $20+ billion business. It’s not that big because it’s smoke and mirrors.
Like ALL advertising media, its costs more or less rise to the level of whatever advertisers are willing to pay for it. It is fundamentally no different than print ads or newspaper or radio or TV or anything else. 80% of advertisers lose money, 20% make some money, 5% / 1% make a lot of money.
The size of the niche makes no difference to these percentages.
I have never advocated “dabbling.” I have always advocated being way better than the average bear. Read my AdWords sales letter. It says 3% of the advertisers get 50% of the traffic. I’ve never given people a rose colored sunglasses view of any of this.
In a tiny sub niche no there is not enough money to hire a pro.
If you want to make money in ANY business then you should expect to have pro-level chops in at least some of the functions of the business. Otherwise you don’t deserve to be in business and you probably won’t stay in business.
There is a pervasive attitude in affiliate marketing that people ought to be able to just show up, buy some clicks and make money. Unfortunately the world doesn’t work that way. It’s a bunch of bull.
If you have sufficient skill, you can ALWAYS make good money in MOST (not all) markets. Some markets are almost impossible to make money in. For some it’s because there’s no money there in the first place. For some it’s because the competition is all Green Berets. In all the rest of the “normal” markets, you alone decide whether you’re willing to develop the skills.
I buy in to what Nic Barrow said, however your response got me thinking. “AdWords is a $20+ billion business. It’s not that big because it’s smoke and mirrors.” Is Google taking a revenue hit by its decision to “slash and burn” affiliate accounts? If the impact is minor, this suggests that the contribution from these accounts is not a large part of the whole pie. Or am I missing something here?
Google values user experience over revenue. They also will avoid legal issues with product claims at all costs. Most of these issues are in specific niches and I doubt this affects more than 5% of Google’s revenue. Plus there’s always more advertisers waiting in line.
I have to say, the link bait worked well. I don’t believe that you believe the title, but I will say that I agree with many points of the article.
Too many Affiliate Marketers have gotten caught up in the CPA hype and their AM’s have been pumping up offers like a Stock Broker with stock. Most of the offers were known to be shady offers and these “reputable” Networks still worked with these ‘companies’ to fool the consumer and practically robbed them blind. You still hear affiliates claim that they ‘should have read the fine print.’ I’m positive they wouldn’t feel that way if their grandmother was one of those people, but perhaps a minority of those people would.
The industry will be around for many years, but using Google isn’t going to be an option for all of these affiliates. It’s not that Google hates affiliates, but rather – Google hates certain products and the way they’re promoted on their network.
I do see a major change developing in this industry, and Branding will be a major stepping stone for those who crave long-term success.
It seems like Google is taking this action to protect their reputation. As a business, I still think it’s important to focus on building a community around your product through strong content.
Louis Slade
Email Marketing Company
very good blog and very interesting to me was a great help thanks for everything
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