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 (info@entrepreneur.co.uk) 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.
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Very good article George and I completely agree. Plus I’d rather wake up at 10am and stroll to my computer to find out I’ve earnt money whilst sleeping than wake up at 6am for the daily grind of a commute in London on the rammed trains. Not possible for me just yet but hopefully it will be in a couple of years.
I love this blog post, i think a lot of the people who give this book 1-2 stars or a poor rating I would imagine tried the affiliate marketing route and must have failed – and in today’s world i think people see it as “If i fail – so will everyone else!” and that everything comes over night.
I read your book “Get out while you can” around 3 months ago and im building my little streams, i haven’t made anything close to getting out of my job but this book quite literally “freed my mind” – and yes, I have earned more than the book cost me after using the information (so in essence it was an investment)
I loved your book, I will also be continuing to follow your future books – one thing i did learn about affiliate marketing very early on was “Never listen to the nay sayers”
George, it’s great reading the points made by the critics of your book. They really have not understood the wider point that you make about how the economies in the West are going to change in big way from Plan A. The old models that our parents grew up with where they experienced enormous house price and asset growth and an economy largely based upon the country’s domination in the world economy are destined to disappear. The economies of the East and of South America will be the dominating forces in the near future and for our children’s future. The UK government still continues to encourage students to go to university and to build up large debts only for them to find their degrees are worthless.
So, Plan A is going to be the solution for a diminishing number of people getting so-called ‘good jobs’ in large companies in the West as they begin to cut down their work forces and burden the people in the good jobs with more work for the same money. I know this is true in my case. I have recently been made redundant. My boss is taking on what I was doing while continuing to manage her existing workload.
And, funnily enough, reading your book and learning about Plan B has been extraordinarily helpful in two ways. Firstly, I have set up 7 affiliate websites since reading your book in Sep 2011. I have started building small rivers of income from them and more than paid for the book, the domain names and hosting costs. I have learnt a lot about SEO in a short space of time because of this. I’m selling a variety of products and services as a result and learned about those markets as a consequence too.
Secondly, I have gained new skills and experiences which are helping me with getting a new job, in the meantime, which employers want and for which they are willing to pay me far more money than I was earning in the job from which I have been made redundant.
The big thing I have learned though is patience from working through your book. It takes time to learn new skills. I’ve made some mistakes (some of them laughable!) while building these small rivers of income. But, each lesson has resulted in an increase in sales. By just keeping at it, I can see that Plan B will work and that I will be less reliant on the risky business of having only one form of income which is the goal of Plan A.
Like the above, it was a dismal shock to me when I first read what they had said about your book. personally I’ve read it over maybe 3 or 4 times (although, the wordpress/seamonkeys stuff I’ve got the hang of and so don’t re-read). I was fairly interested in what he had to say, but, like you point out, its not going to come soon. One thing I do have to mention though, is that if possible, a edition of your book with a chapter page – would be a great help – when I first started up, I was trying to find the different points and ended up spending hours for 30 minutes of the information that was actually ness. on the starting part of my website. Luckily I sort of know the structure now, but I know this could probably be a help to future readers.
Sam, you’re dead right. The book does need a contents guide / index. It is one of the failings of Get Out While You Can and one that I will remedy with future editions (not much good to you, I know, but I do listen!).
I can honestly say that I really enjoyed the GOWYC book and have now read it through 3 times. The very title of the book struck a deep chord with me as I have always known that my mind, my personality and the way in which I motivate myself are far better suited to working for myself, from home. Took me 20 years of high pressure jobs, overseas and in the UK to figure that out – but GOWYC was definitely the first step in my journey – thank you. I first read the book on kindle and my only comment (which I guess will apply to most books on kindle) is that the intricacies and small text of pictures / diagrams tends to get lost and is not very readable. But that’s an Amazon problem.
My second port of call in my learning was a complete gamble – the purchase of an online video course at unstoppableaffiliate.com, which – by complete chance – helped accelerate my learning of SEO, wordpress tricks, plugins etc. For the avoidance of doubt, I am not an affiliate for these guys and have not left any links to any of their sites. I just liked the way they helped me learn a lot of the practical issues.
One point they did make, which I don’t recall being obvious to me in GOWYC, was that new domain names will take longer to get search engine recognition, whereas, older domains have ‘in-built’ recognition and which you can back link more aggressively.
For me, I have just set up my first ‘guinea pig’ affiliate niche site (address above). Of course, its taking time to build the content, get site visitors, get search engine recognition etc…..but having been through the hoop on this first site, I will look to get myself into more profitable niches. George – many thanks for giving me the information to enable me to take the first step
This is an interesting article, sometimes people can really suck on a lemon!
I have just finished your book and it’s inspired me to start finding a way to get my own financial freedom, and have set up my site diet recipes and will continue to monetize and promote it.
As a user of the internet I don’t consider cashback sites but would never have a problem using an affiliate link on a website that has useful content and advice.
@David Glad you enjoyed the book.
It’s not always the case that older domains have a headstart as far as search engines are concerned. In fact, if it is a domain that has been penalised in the past, it may have the opposite effect.
I also think “aggressive” backlinking on any domain name is a mistake. It is an obvious attempt to game the search engines and easily spotted.
As Panda clearly underlined last year, the days of using shortcuts to rank sites that really don’t deserve to rank are more or less over. Focus on creating quality unique content and you will attract genuine valuable traffic.
Hi george ,
I really enjoyed your book and although I have managed to get too busy with client work to properly focus on applying what I have learnt I fully intend to soon. My concern being the new eu cookie regulations. What effect do you think this will have on affliliate sites?
@Tracey I blogged about the EU privacy and cookie legislation last year:
http://www.entrepreneur.co.uk/2011/08/22/does-eu-cookie-legislation-spell-the-end-for-affiliate-marketing.html
Unfortunately, things are no clearer today than they were last August. I’m quite surprised that so little concrete information is available to affiliates (and others because all webmasters could be affeced).
What effect will it have on affiliate marketing? Once we know what it expected of us and can implement solutions, it shouldn’t have any real negative impact. Not long term anyway. It’s this uncertainty that is causing needless worry.
I read your book, some good stuff and some not quite so good stuff BUT suitably inspired I went ahead and bought a domain. I then spent 3 months writing and SEOing the site, placed affiliate links on every page. I did well, it went to no.3 in Google and sat there for 4 months solid, happy days! Earnings dribbled rather than poured in to my AWIN acount, think that was due to choosing the wrong topic more than anything else. Then BOOM, my site vanished 2 weeks ago, Google has taken a big dislike to my site. I have done a LOT of research since and have found that Google’s gameplan is to demote any site that has been created for the reason of purely generating Affiliate sales, they don’t like affiliates! They put them in the same category as spammers. Their number one mission is to kill them all off. I’m stuck now, I have a website dead in the water and not sure how to proceed?? I love the whole affiliate concept and am determined to find a way to make it work. Maybe only have affiliate links on a subdomain or a second domain. Then concentrate on writing great content on the first domain and no affiliate links. Then just link people to the subdomain or second domain which I maybe block Google crawling. Can you shed any light on this George? Help!
Hey George, it’s your Kiwi contacts here and I just want to ask Mikeyboy a few questions if you don’t mind. Does your site rank on Bing or Yahoo? Have you read “SEO For Dummies”? There could be lots of reasons for a site to disappear and re-appear and that’s assuming you played by the rules and didn’t try to hoodwink the crawlers. How does a site that is “created for the reason of purely generating affiliate sales”, get to no.3 in google without having great content? Something doesn’t seem to quite ad up and I’m a little sceptical of your affiliate-hating google theory. What did George say about good things taking time? Anyways Mikeyboy, I wish you all the best in your quest and I’d be interested to hear what our mate George has to say on the matter, provided he can drag himself away from the beach of course.
Cheers. Phil.
@ Mikey
A few quick thoughts. First, thanks for buying my book and I’m pleased it inspired youy (I know it’s not perfect).
But Google doesn’t like affiliates? I think you are wrong. There’s the Google Affiliate Network for starters! What Google has said is that “thin” affiliate sites that contribute nothing of value to the sales process don’t deserve to rank highly – and I wouldn’t disagree.
Google’s number one mission isn’t to kill affiliate sites – no more than removing “made for AdSense” sites was to do with killing AdSense. It’s number one mission is to produce the most relevant search results possible.
Hand on heart, does your site deserve to rank at number three for the most relevant keyword? Take away all advertising and affiliate links and what value to visitors does each page bring to the table?
Those three months you spent building the site – how much genuinely unique and valuable content did you add during that time? And did you continue to add such content during the four months it did rank?
Also, websites don’t rank – web pages do. Each page that you create has the potential to rank for a related keyword or keywords, not just your home page. And it is often these pages that are found via longtail searches that are the most profitable in my experience.
A chapter in Why Do Only Fools And Horses Work? is called Google Doesn’t Owe You A Living. A phrase that is definitely worth remembering.
Hi to you both. My site Funny Baby Clothes, click my name if you want to take a look, is ranking 5th in Bing/Yahoo and Phil it was genuinely ranking 3rd in Google, I was thrilled. The Google hate thing are not my words, just what I’m reading all over the net lately. I have totally played by the rules, there’s no long term advantage to cheating, you will clearly sooner or later be burnt by Google. Anyway I wouldn’t have a clue how to do that anyway. I use a basic wysiwyg program, no coding or clever stuff involved really. George, I really love the sentiment behind the book btw, it’s spot on to how I feel about being sucked in to the system, I’t has never sat well with me being a wage slave to some uncaring boss and basically getting no thanks for it to boot! Unfortunately I have no other choice until I can make this affiliate thing work. I have added unique text content to every page, mainly for the reason of SEO I must add, so I guess the value to the reader is limited. The remainder of each page is then the affiliate links hand picked. Once at no.3 in Google I slowed on adding new content down to probably a quarter of what I was doing before, I thought well I’m at no.3 so my job is more or less done now, not thinking that that would be a deciding factor to dropping me way out of the results so dramatically. So how is all that any different from big bean bags though, am I missing something? You have only created that site for making money from affiliates links the same as myself and the content on there is written for the same reason, SEO. Do you think Google doesn’t like MY site because I have gone too overboard on links per page maybe? I was simply trying to make it more of a shop feel. Should I have added “Nofollow” on the links maybe? Please help, my head is spinning with all the misinformation on the net.
@ Mikey I’ve only just noticed that your site only lost its ranking two weeks ago. It could be nothing is wrong at all and Google are simply using an old database while they prepare to release a new database. The best thing to do is not to panic and to wait to see if your site makes a return.
Ultimately, only Google will know why your home page is no longer ranked number three for that search term (and why it was ranked at number three a few weeks ago).
The site looks good, but personally, I think the site lacks genuinely valuable content. For example:
http://funnybabyclothes.co.uk/funny_baby_longsleeve_tshirts.html
Take away the Adsense and the affiliate links and what is left?
Hey Mikey, I’ve got to admit I agree with George on this. You’ve copy and pasted the images, title and price of each top. the bare basics. No description till you go to the affiliated site – your site is a haul of affiliate links all-round. It doesn’t exactly help tell readers anything new, or satisfy their wants. Its more of a gateway to the affiliated site. I tried the same, it didn’t work for me until I published content with the affiliation links. Original content. Must be off. Gotta write a article about the new mario-sonic olympics.
Hi Sam and George. Funny Baby has turned out to be a bit of a learning curve for me, made some real clangers. I was approaching it from the idea of providing an easy to navigate shop for someone, thought that might be useful in its own right, but clearly that’s not a winner with Google. Would have been OK if they were my own products selling from a cart, but NOT OK when they are just a bunch of affiliate links. My next attempt will be as much as 90% unique article 10% affiliate ads/links and see how that pans out. Thanks all
You’re not going to believe this, but after everything that was discussed above about Funny Baby Clothes, and most of you comments were valid, it has now reappeared at number 3 again in Google!! I have changed nothing on the site at all since it vanished 3 months ago. Explain that one?? I shouldn’t knock it because affiliate sales are starting to roll in again, but just leaves me more confused than ever now as to exactly what Google are really looking for in a post Panda and Penguin world???