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Bad Economy and Affiliate Marketing

A Question for the Old Timers



1:31 pm on Oct 11, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

I started doing affiliate marketing in 2003 as a direct result of finding WebmasterWorld. I left Lycos shortly thereafter, and started doing affiliate marketing full time, and haven't looked back. 2003, as it turns out, was a great time to start out due to the economic boom, which has come to an end.

Given the current state of the economy, I wonder what affiliate marketing looked like from 2000-3, the time right before I started and a time of economic contraction.

Whatever it was, it's certainly going to be back. I can already see lowered conversion rates, but what else can we expect?


6:53 pm on Oct 11, 2008 (gmt 0)

WebmasterWorld Senior Member jimbeetle is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I'm not sure we can predict anything in this instance as this predicament is unlike any other we've recently experienced. After the late '90s bubble burst, sure, a heck of a lot of people were directly affected, but many weren't. The programs I promoted at the time, mostly travel-related, did very, very well.

This time it's different, very different. The credit crunch part of this crisis affects everybody -- there just isn't any money being circulated through the system. Over the past few years I've developed a series of sites that targeted "disposable income" niches. They did very well until a few weeks ago; can't say they bottomed out, but it's coming close to it.

The only thing I can do now is what I've done before, after the bubble, after 9/11; put my head down over the keyboard, maybe go back to the 12-hour day, work on improving what I already have, maybe try to develop a couple of things on the to-do list, simply try to be ready for when things take an up-turn.


5:41 pm on Oct 12, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

>> what affiliate marketing looked like from 2000-3

Casinos & pills dominated the AM scene


7:06 pm on Oct 13, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

simply try to be ready for when things take an up-turn.

That's my plan. I do okay with travel related AM and feel that the good days could be finished for a time. If so, they will come back and when that happends I'll be ready ;).


1:12 am on Oct 14, 2008 (gmt 0)

WebmasterWorld Administrator skibum is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I'm seeing conversion rates stay about the same right now. Average order value is going down. Orders for really high end stuff are slowing a lot.

I do mostly consumer essentials, some of which have luxury versions. Things that deal with emotions or urges still seem to be doing well.:)

Taxes will always be a goldmine for a month or two a year.

Though they still don't quite know what to make of search, CPG companies will probably start to spend more which would fall in the AdSense category. They'll spend more on clicks and impressions for a while and then they will start to get smart about it in the next 10 years.

It should be a great time to ramp up. I'll bet there are still tons of companies out there that don't do search very well at all but managed to make money in a buoyant economy. They don't have the knowledge to tune the campaigns so they'll just cut chunks that don't perform and may end up running on just their own brand terms. If that happens a lot, it'll be a good opportunity to buy traffic on the cheap to build up new sites while things are slow. If you are an affiliate with low overhead, you can run on low margins while merchants have employees, agencies, ad serving costs, and more. Budgets will probably get cut before employees.

Bid management systems don't work very well and as an affiliate you can cherry pick apart the paid listings in ways that an automated system doesn't or can't. Since there is so much spent on bid management, the things that matter (keyword, match type, laser targted ad text and conversion path) don't get the attention they should and there is room in paid search going direct or to your own site.


2:06 pm on Oct 14, 2008 (gmt 0)

WebmasterWorld Administrator 10+ Year Member

I don't know what to expect, but when things are down for some people, they are up for others so look for things that can help people out during financial duress times, whether it be bargains and discounts, better financial deals interest rate wise, work at home opportunities, and various things of this nature.

Being an affiliate, you need to adapt and change and work whatever seems to be the flavor of the moment, and at this moment, that seems to be financial trouble for the economy.


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