For a lot of bloggers and website owners, including authors, affiliate revenue is one of many ways they monetize their site. But recent events show us two things again, things many of us have known for some time. Amazon and others can change affiliate payments and terms anytime they want. And we can’t do a thing about it.
The truth is, every site owner with more than half a toe in the water of affiliate marketing knows this, and we also know that putting all of your eggs in one basket, perhaps especially the Amazon basket, can lead to disaster when things suddenly change. So what does this mean to publishers, website owners, and even authors?
Other Revenue Sources Will be Needed
Even just a few years ago there was a simple way to monetize a website. Basically you would build it, get traffic coming your way, and run ads, either Google, Amazon, or others, and ta-da! Passive income. All you had to do was keep that traffic coming.
Affiliate links and ads were, quite simply, enough provided you had enough traffic, and the clickbait and paginated articles abounded as a result. Then Google cracked down on pagination and similar content by directing traffic and rankings elsewhere and revenue share from both ads and affiliates went down.
Enter other methods: SEO article placements, direct banner, and side-bar ads, and even site sponsorships. Even big publishers suffered the effects, and subscriptions and paywalls became more common.
Still, affiliate marketing lived on, and it made sense. If you drove traffic to a site for people to make purchases, you got paid. Pennies maybe compared to other ad models, but it was something at least.
Amazon’s latest slash, when publishers are already pinching pennies and struggling with new regulations like California’s AB-5, means yet another passive stream of revenue has dwindled, in some cases slashed by as much as 80%.
Scarce Ad Dollars Just Got Scarcer or More Abundant
What does this mean to marketers? Well, either precious ad dollars just got scarcer or more abundant. What has happened over the last few years?
- More big companies have discovered that digital ads net way more than traditional television and radio ads, so the cost for bids in various categories has soared through the affordability roof for many small businesses.
- Amazon has turned more and more to “pay to play” ads, which means that you almost have to run ads on its platform to get your product seen with any prominence and regularity. For small businesses with narrow margins, this is problematic.
- The “fairness” of bidding systems is broken, but there is no clear path to any other system.
Affiliate marketing was a possible answer. Get a small, niche blog to run ads to your product, one relevant to their audience, and you both would make money on the deal. The effect of slashing affiliate revenue share means that I’d rather use that ad space for something else, something that makes me more money.
The same will be true of other publishers, even small, niche blogs. The Amazon logic might be that they think people will end up on Amazon to make those purchases anyway, but if enough publishers turn away from them, it will impact traffic.
The problem for marketers is that it will also reduce traffic to items they were selling through affiliate ads unless Amazon chooses to promote them a different way, and there isn’t a single thing we can do about it. Because it’s Amazon’s house, and they can run it any way they want to.
We’re Allowed to Wonder What’s Next
So what’s next for affiliate marketers and those who welcome native ads? Well, there is certainly a gap to fill. Google AdWords is one solution, but not the only one. There are other advertising networks out there, and if they can attract some of that Amazon traction and money, it could provide a good answer not only for publishers but for marketers as well.
But for publishers and website owners, this is a crossroads. If you’ve thrown all your hopes in Amazon affiliate marketing, your income could have just dropped significantly at a time when marketers are more nervous than a long-tailed cat in a room full of rocking chairs.
So we have to wonder what’s next. And trust me, anyone who says they have the answer is wrong because at the moment there’s too much we just don’t know.
Amazon Affiliates Program May Reverse Itself
There is one scenario where everyone could actually come out ahead. Amazon could actually see a loss in traffic, reverse themselves, and even have to offer incentives for publishers to return to running their ads for the simple reason that we have now seen that Amazon has control, and they will use it.
This is somewhat likely, but not assured. The big question publishers will be asking themselves is if the risk of going backward will be worth it. One thing is for sure, and that is diversification will become much more popular. It will have to if website owners want to survive.
Directing Traffic Your Way Matters
Here is the thing: your traffic is yours to manage, and you can show your audience whatever you want to, from no ads to select ads that offer higher returns to Google or other ad publishers that will enable you to eliminate the need for Amazon affiliate links at all.
If enough publishers will do this, maybe Amazon will see that the little guy does matter after all and will be less likely to do this kind of thing going forward.
The thing to remember is this: Amazon will survive this pandemic—they have much deeper pockets than the little affiliates their actions affect. But what it does show is how far they are willing to go to keep their edge. The only thing that remains to be seen is how far brands will go to enable this behavior going forward.
It might just be time to ditch the ‘zon when it comes to affiliate marketing and move on to whatever tomorrow brings.