 | 40% Of Affiliate Revenue From Cashback |
Matt Wood, head of Existem and the founder of A4UForum, features in the latest podcast from Affiliate Blog and if you have some time handy during the day have a listen. Matt and Fraser discuss various aspects of affiliate marketing and how things have developed, but one thing stood out during the chat - and that cashback/loyalty sites accounted for 40% of sales on one (unnamed) network, and that that percentage was higher than PPC.
This is an amazing statistic! It’s great for established loyalty sites, for merchants and for networks, but it’s perhaps not so good for other affiliates.
If we assume that PPC makes up 35% of sales (I have no idea if this accurate, it just sounds like a nice number), that means a whopping 75% of affiliate activity comes through two channels. Both channels are hard to become established in if you’re a new affiliate. Cashback sites are dominated by a handful of well established brands, whereas PPC is perhaps not the easiest area for new affiliates to start in.
That means, that everyone else is chasing 25% of the affiliate pie… and that will include the SEOers, content sites, and email marketing. Ok, the numbers are flexible, but what we’ve seen of late makes things even harder. For example, Merchant X sends us a discount code, we tell our users that discount code, our users then tell each other “you can get also get cashback…”! Very frustrating when that happens - I can tell you!
There will always be opportunities for new affiliates, but a few simple stats and a broad pinch of assumption demonstrates how difficult it is to get established or even get a foothold on the affiliate marketing ladder. Perhaps even more so when affiliates are even considering leaving AM behind (Affiliate Quanda). Niche sites are something that many suggest are the way forward, but niche doesn’t always mean longetivity, and that could be an issue to becoming established.
The 40% figure also demonstrates how important it is for networks and merchants to convey accurate information to affiliates about EPC. The number of times we’ve been told that a product is flying or a merchant is hot accompanied by EPC’s is phenomenal - yet those figures only make genuine sense if they’re broken down into how they are accomplished.
on March 19, 2007 at 4:05 pm Chris Johnson wrote:
Just some information to follow up Jason - here’s a list of over 50+ cashback sites. Just shows how many there are and possibly an answer as to why cashback sites provide such high sales. - http://www.cashbacknews.co.uk