Affiliate Marketing

For those affiliate marketers who want to know what their compatriots are like, you will probably want to read the affiliate census released by E-Consultancy in January of 2007. They surveyed over 1500 affiliates in the UK to get the results presented in the 49 page document. At risk of being vain, I must admit I found it fascinating to read about how I compared to other affiliate marketers in the industry. While the census done by e-consultancy was strictly for affiliates operating in the UK, it sheds much light on an industry of freelance marketers worldwide.

Most of the data in the census is common sense, but I was surprised by a few things.

Only Source of Income 
Only 12% of respondents say affiliate marketing is their only source of income. It is unclear whether affiliates are referring to other internet advertising revenue streams like Google adsense, or if they are talking about day jobs. Even for those who do affiliate marketing as their day job, only 43% say it is their only source of income. I think this reveals the entrepreneurial spirit of affiliate marketers who have learned the hard way not to put all their eggs in one basket. The internet changes much too quickly for that approach. The affiliates I am in touch with always have other projects going on the side in an effort to diversify their revenue streams. I take this approach myself.

Level of Income
The census found that there is an enormous diversity in the level of income earned by affiliate marketers. Of course there is the obvious split between those who do affiliate marketing full time and those who just do it part-time as an added revenue stream. The census states:

• Of those who do affiliate marketing as their day job, 61% earned at least £20,000 a year.
• 10% of day-job affiliates (a total of 34) earned more than £750,000 in the last year.
• Of these, 3% earned between £750,000 and £1 million, another 3% earned between £1 million and £2 million and a further 4% said they earned more than £2 million.
• Of the 27 affiliates earning more than £1 million in the last year (2% of all affiliates surveyed), 15 run their own affiliate businesses, 6 are partners in an affiliate business and 5 work for someone else. (One of these 27 affiliates did not indicate if it was his or her own affiliate business).

It looks like these are pure revenue numbers. The census goes on to state that the cost of operating an affiliate marketing business at these high levels is enormous. These costs eat up a large portion of the total revenue earned. I have found this to be right on the money.

SEO, Banners and Paid Search
I was surprised to see that the majority of affiliates still use SEO more than paid search. While there are several major advantages to SEO, paid search is the easiest way to monitor your ROI on an offer by offer basis. I feel paid search is the starting point, and once you have keywords that convert, SEO can be leveraged over the long term.

What is even more shocking is that more people use banner advertising than paid search. I thought banners went out with the dot com bust. Simple banner ads perform terribly on a CPM level. Affiliate marketers would be better off selling their ad space if all they are doing is banner advertising. I have found it to be a waste of time.

It seems there are still a lot of affiliate marketers who don’t like to use paid search, which comes in third place behind SEO and Banners under methods used to promote merchants. That’s just fine with me. The less competition, the cheaper the clicks.

I wonder how a US based affiliate census would come out. I have a feeling it would be quite different, especially regarding methods used. If you haven’t read it yet, download the affiliate census for free by E-consultancy. It will give you insight into the mind of the affiliate marketer.