I talked about this with a handful of different people across many different areas of our industry at Xbiz earleir this week and was surprised to hear the sentiment echoed so often, there is a growing concern affiliate programs are on their way out.
Some people were leaning towards shifting priorities, backing off affiliate traffic and putting stronger focus on in house traffic generation, and while I agree on some level this should always be a part of your game plan, my experience with that is long term someone will not do for you what they could make more money doing for themselves - as an affiliate. Think of it along the lines of how the best SEO guys in the world don't work for anyone but themselves, same with inhouse traffic generators.
I think what's going on is a combo of artificially inflated payouts and changes in the landscape.
To put together a good affiliate offer most of the time you are going to have to do a loss leader, where you offer a payout that is a little bit sweeter than the initial upgrade price. This puts the co at a loss for the first month- which for the majority of us doesn't put you in a bad spot on its own. When fuzzy practices (like prechecked cross sales for example) started coming into play some companies started factoring this in when calculating their offers. IMO this artificailly inflated the payout amounts because the accounting is no longer based on the strength of the core product being marketed / sold.
The second factor is traffic generation is becoming increasingly more complicated, and I think that's always going to be true from one year to the next. I agree with what BestXXXPorn is saying, you've got to be a little smarter than you were previously. A good example going back to inhouse traffic generation is some of the people who have worked for me at past companies have left to do it on their own; some are still out there kicking ass years later and some have actually taken a step backwards and are flipping burgers.
The guys who failed are ones who couldn't come up with their own ideas, they took what they learned from the company and then duplicated it a thousand times over and ran it into the ground. When the old methods stopped working they had no idea where to look or what to do next. They couldn't innovate on their own, they could only do what they had been trained.
The ones who succeeded took what they learned as a solid base and continued to build off it. They didn't put all their eggs in one basket and continually tried new things and developed new methods.
Mainstream affiliate programs and CPA networks seem to be showing some pretty steady growth. I think in adult we are experiencing climate change. The card companies have tightened the belt when it comes to billing practices, some companies can't afford to operate the way they used to, and there's going to be some fall out from that. Some programs won't survive, but I don't think the sky is falling.
