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Yesterday, i spoke with a couple of big affiliates that still echoed these thoughts. One mentioned that the top 4 affiliates provide around 80% of their affiliate business ( SEO and PPC ) .
Is the 80 / 20 rule alive and well amongst most affiliate suppliers?
If so, has that increased your sense of importance?
[edited by: Whitey at 5:11 am (utc) on April 27, 2007]
The 80/20 rule just happens to be the case for a lot of businesses - the fact that it adds up to 100 is purely coincidence.
The original observation was in connection with income and wealth. Pareto's noticed that 80% of Italy's wealth was owned by 20% of the population. He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied.
It also applies to a variety of more mundane matters: we wear our 20% most favoured clothes about 80% of the time, we spend 80% of the time with 20% of our acquaintances etc.
The Pareto Principle [en.wikipedia.org]
If the parameters in the Pareto distribution are suitably chosen, then one would have not only 80% of effects coming from 20% of causes, but also 80% of that top 80% of effects coming from 20% of that top 20% of causes...
Which leaves you with 64% of your AM income coming from 4% of your AM channels.