Why Haven’t Cashback Sites Killed Affiliate Marketing?
What I’m about to say will shock and disappoint you (especially if you’re my Mum).
Not everyone likes my book, Get Out While You Can.
Sad, but true. Indeed, according to a spate of reviews that appeared on Amazon within a few hours of each other, some people even hate it.
One reviewer describes it as “an awful book”, another “cringe-worthingly bad”. One poor soul even said it was “a waste of money”. As one of the reviews pointed out, “It fails to tell you that the reality of living off the net requires a good understanding of SEO” (his copy was obviously missing the entire chapter I included on SEO).
But one comment in particular stopped me in my tracks.
“What the book fails to mention is Quidco and Topcashback, these days anyone switched on knows that as a customer they can earn the commission themselves by using one of these websites. The reality is that the market preached about in the book is dying a death, and the only way to make money out of it is to write a book telling people how to make money out of it.”
The reason it struck such a chord with me was because it reminded me that I hadn’t given cashback sites a second thought for years now. I had honestly forgot that cashback sites were meant to spell the end of affiliate marketing as we know it.
This was talked about at length in affiliate circles between 2006 and 2008 and no doubt still crops up today on forums. I even blogged about it myself in March, 2008, under the title Will Cashback Sites Mean The End Of Traditional Affiliate Marketing?. As you can see it didn’t particularly worry me then and it doesn’t today.
Despite the advent of cashback sites, my affiliate marketing income has grown year on year since 2006. And funnily enough, while my critic was penning his review, I was enjoying a very good day as an affiliate – despite the fact that it was a public holiday in Scotland and I hadn’t actually returned to the coal face. I took the following screenshot from my Affiliate Window dashboard which shows that I had earned £156.82 for the day from merchants that I work with on that particular affiliate network.
Affiliate marketing is only one of the ways I monetise my websites, and Affiliate Window is only one of the networks I work with, so £156.82 from that revenue stream adds up to a good day for me. And I’m not even that successful an affiliate. I know there will be affiliates reading this who will see that as small beer.
But the point is that six years on from when the naysayers were first predicting the end of the world for affiliate marketing, there’s still plenty of money to be made for us small specialist content website owners.
So the question I’ve been asking myself is, why haven’t cashback sites killed affiliate marketing?
Well, the first point to make is that cashback sites are part and parcel of affiliate marketing. Along with voucher code sites, they now account for the largest share of sales that affiliate marketing delivers to a good number of merchants, but they don’t drive all sales. And as the affiliate marketing sector has grown year on year – it now drives around £5 billion in UK online retail sales a year – we are all eating from a much bigger pie. To give you an idea of how big the pie has grown, even in the last 12 months, there were 100 million more visits to online retailers in the UK during Christmas 2011 than during Christmas 2010 according to Hitwise. That’s 100 million more opportunities to make money. Just at Christmas.
And the idea that affiliate marketing is “dying a death” as our commentator puts it will certainly come as news to affiliates across the UK and beyond. According to the European Affiliate Landscape Report for 2011, 20% of affiliates who responded earn between €1,000 and €5,000 a month from affiliate marketing. Plenty make more than that. Like me, some of them will have other revenue streams too.
But that still leaves the question, why is it still possible for content affiliates to make money? Well, there are a number of reasons.
- Not everyone does use cashback sites – just like not everybody shops at Asda
- Those that do use cashback sites don’t use them for every purchase (big ticket items are obviously more likely to go through cashback sites)
- Lots of merchants have drastically reduced the commission they pay to cashback sites compared to content publishers – making the cashback offered on many purchases less than that offered a few years ago
- Not all merchants will work with cashback sites – today I got an email from boutique hotel specialists, Mr & Mrs Smith, for example, saying that they would no longer be working with cashback sites (and yes, that does make me want to work with them – they are on Webgains in case you want to too)
- Some merchants issue discount codes that cannot be used by cashback sites – and often the discount offered allows content affiliates to promote offers as good as if not better than those offered by cashback sites
So the fact is that cashback sites haven’t killed affiliate marketing and they aren’t going to either.
The bottom line is that even if they did spell the end of traditional affiliate marketing, there will always be ways of monetising high quality content online.
I’ll give the final word to my friend, the critic:
“Do not believe anything in this book – do the opposite and go for Plan A – study hard, get a good job with good wage, and earn a salary every month.”
Aye, Happy New Year to you too, sir.
PS Here’s more proof that small niche sites make money, courtesy of Darren over at Bedazzle.
Get Out While You Can is available now from Amazon. It contains a chapter on affiliate marketing.
If you would like to be added to the mailing list for my forthcoming book, Why Do Only Fools And Horses Work?, send me an email (email@example.com) with Fools And Horses in the subject line. I won’t pester you with lots of messages, but I will let you know as soon as it becomes available.