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Imagine the benefits if linkshare could automatically place a product relevant to the current page with your affiliate code in it. That could earn me atleast five times what adsense currently makes me ..
On a related note, I use the AWS from amazon to achieve something similar and I get about 1/3rd the revenue of adsense out of it. But the targeting is poor and amazon doesn't have enough products to cover the entire spectrum.
It's a no-lose situation for the advertiser, and mostly a losing proposition for the affiliate. I make about 2 cents a click for traffic to Amazon, and several times that for links to Adsense.
Traditional advertising, where advertisers pay by the impression, is the fairest model, because they're responsible for the success of their ad creative, while the publisher just provides eyeballs. Pay-per-click is compromise, still skewed towards the publisher, but that's all that people will swallow right now.
Chances are, any affiliate fees you make are a fraction of what that advertiser is paying to advertiser in other ways.
Still, if CJ or Amazon could figure out a way to target products for the content on a page, it would be a huge leap forward for their affiliate programs. No argument here.
I don't you'd get the kind of affiliate revenues you're predicting
I have already seen better results. In another thread I posted how I use AdSense to find affiliate partners. When I do I immediately switch the AdSense code out for the affiliate code. The return is better from what I see. The huge groups like Amazon are crap deals anyway so I stay away from them and go with the smaller guys who pay more and really do have something specific to sell and aren't a superstore. I also try to use the affiliates who run their own softare since CJ, BeFree and such skim about 30 percent of the profits so I can usually negotiate a better deal.
universetoday - You are right about people going directly to the source as I imagine that happens with AdSense also.