Affiliate marketing has its origins in Leadgen. Leadgen has always been good business for publishers with the scale and the will to invest in the infrastructure to drive it. Leadgen is the collection and delivery of contact details of people interested to purchase an item. There are different levels of leadgen starting with just the contact details and going all the way to setting up meetings and even actual purchase. Affiliate revenue is a subset of leadgen and came into online existence with the advent of ecommerce. Affiliate revenue is for driving traffic, clicks or purchases to other websites. While generic Leadgen is more B2B focused, affiliate marketing is B2C, and can generate revenues for all shades of publishers, ranging from individual bloggers and upwards.
How big is the business? Estimates vary widely. Hostingtribunal.com estimates affiliate marketing to be worth over USD 12 billions. Digital Global estimates it to be only half that size, at USD 6.8 billions.
Smart publishers integrated backwards to include call centers and other direct contact infrastructure to drive the business. Email continues to be the biggest driver for both leadgen and affiliate, with content marketing and events also being big drivers for the business. Social media acts as a big amplifier in reaching out to larger audiences. But part and parcel of the business landscape is the abysmally low conversion rates, with a 2% conversion being reason for celebrations in many places!
There was a time when leadgen and affiliate revenues were the exclusive domain of publishers. But that is no longer the case. Today leadgen agencies, call centers, specialized providers and aggregators compete with publishers for all kinds of Leadgen and affiliate revenues.
In short, while the pickings are good, challengers are on the prowl even as the spray and pray nature of the leadgen and affiliate businesses will continue into the foreseeable future.
This article is part of a series on Digital Publishing trends for 2020. You can read the others in this series below
1. It is the reader, not the content
2. Long tail content comes into play to increase pageviews
3. The lure of the walled gardens
4. Is custom content the new king?
5. Programmatic advertising and other technology nightmares
6. The bot brigade and more such frauds
8. The second digital transformation is well on its way
9. Are paywalls really the next big opportunity?
Years back, there was this big debate about total cost of ownership (TCO). This was about software. The argument was that you considered initial costs when choosing software. But the total cost over years of maintaining it is much higher! The debate at that time was on which software had the cheapest lifetime costs. That debate died down after some time and everything settled back to normal. But it brought awareness that software costs much more than its one-time cost. Today, no one writes their own CRM or ERP systems. Most software has moved to a licensed model. This makes the lifetime cost...