Disadvantages of using Affiliate Marketing on Website

What is Affiliate Marketing

Affiliate marketing is the process of referring someone to another company’s product or services, and by doing so you can earn a commission. Most affiliate programs are completely free to join, and don't cost anything.

What is pay per click advertising

In pay per click advertising - publisher display ad and get paid for ad click.  Example is adsense program.

What are issues with Affiliate Marketing

If you are using CPC (e.g. Google adsense) - you will get RPM of 1-5$.  It means you will likely to earn 1-5$ if 1000 user visit your page. Approximately out of 1000 user who will viist your page 1-20 will click on ad.

If you are using affiliate marketing - how many of these 1-20 users will actually buy product. Almost none. Out of 1000 people who click an ad 1-5 user will probably buy.

To get 1000 click you need 50000 page views.  So if you get 50000 page views you might get 1-5 sale.  Depending o product you are selling you will get commission on this.

How much you will earn

Ask this question to you - if you are on unknown website.  You see an ad.  You like the offer - you click it and see offer.  (People don't mind doing it)

Will you give your credit card to a site which you just find thru a ad on other site.  Most people hesitate.

User do not mind giving credict card to branded site.  But won't they go there directly instead of going thru a link from unknown site.

Cases where Affiliate marketing working

Affiliate marketing can be useful  -

  • Your friend like a product.  Your friend recommended product to you.
  • Company selling the product give referal bonus to your friend.

In this case you trust your friend and you know your friend won't recommended you bad product just to get bonus.

Issues with Web Affiliate marketing

In Web affiliate a website is showing product.  They are not your friend.  Their objective is to show you product and get commission.

OK. People can show affiliate ad on their blogs.  As they have repuation - they should only recommend good product. Agree it should.

Here are issues - Many company who run the platform for affiliate advertising - they discourage above e.g.

If my blog show an advertisement, my Mom buy that product every month  by clicking on my ad - Affiliate ad provider will say this is repeat user.  After first or 2nd time they will create hurdle. By contract it is not a problem because

  • You can recommend prduct to your relatives
  • There is genuine sale

However affiliate platform company will say they have right to decide whom they authorize to show ad etc.

In short - till the time you are showing ad, giving impression - it works for affiliate ad provider, it work for advertiser

  • Affiliate ad provider is charging advertiser (Fixed fee or impression commission +  %age of sale)
  • Advertiser is getting free impression

but publisher is only given %age of sale.   Otherwise publisher does not get anything.

Getting sale from new user is difficult.

If publisher recommend sale to friend/relatives/colleagues - sale will go thru but when there is time for payment - affiliate ad provider will create such issues that there are repeat users.

Conclusion

Website affiliate marketing programs are designed in unfair manner.  These program mislead small publisher who does not have adsense account etc.

On any day - you will earn 100 times more from adsense account rather than affiliate marketingt account.

In adsense account - you should not ask anyone to click on ad.  It is fair.  Because advertiser get charged and you get paid on click.

In Affiliate marketing account - you recommend product to people on your blog.  Publisher only get paid when consumer will buy a product.

  1.         Getting a click is difficult
  2.          Getting user to buy product is 100 times more difficult 

 By convinving your friend customer - even if you reach step 2- affiliate ad provider can find a reason not to pay publisher.