Is the Affiliate Model Dead?
 

While discussed at length on GFY by Robbie and others, this was an interesting read.

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Both of those statements are 100% true. That being said, is it dead? Not quite, but it is dying a slow and painful death.

someone sending customers to another business (affiliate model) will never die.

however, in adult, it is harder and harder

I still make a lot of money from pushing affiliate programs. And Dating Factory is making a killing from a affiliate traffic.

The affiliate model is a great way to bring in customers. It's just that Online Adult's version of it was doomed to hit a wall. It worked in good times, when the going got tough because of the problem the Online Adult's version of affiliate marketing created. The flaws are clear to see.

It was too easy to be an affiliate. People say that all it takes is a digital camera to shoot porn. Well all an affiliate needed was a computer and a connection to the Internet. Giving them so much help and money for a sign up, just made it easier and built what grew into a barrier between the buyer and seller. This barrier is now an alternative to buying porn. So free porn now sells a lot of Dating, Cams and penis pills which will hurt recorded porn people.

This is now becoming true for paysites. Because to sell something, in profitable numbers, today the product needs to be good to excellent. Sites and sponsors who thought all it took was traffic are discovering the surfer isn't so dumb.

What is good in porn is not defined by image clarity or mega pixels. It's the actual content on the screen being good enough to convince someone to buy.

Simply put it will become more of what is happening today. surfers going to the mega tubes, making most affiliates redundant and making recorded porn harder to sell.

Programs should hope not. a good affiliate could out market you any day of the week. Why??? Because they care more about the conversions then you do. They look at every click on thier pages, banners etc to get the most of every click. if all we had were sponsors with thier(sorry to say) sad generic banners, all the sites would look Horrid and sales will match that.

i wouldn;t count the affiliate out yet. (Unless manwin buys all the traffic)

12clicks covered that very well. Once one does it, hundreds do it.

The major idea for years, is to give away more free recorded porn than the next man. So more are affiliates are turning to cams and selling traffic. Will it ever replace the sales of recorded porn in paysites?

CyberHustler no wisdom, just observation.

For the most part affiliates are an exploitable resource. Most programs aren't paying anywhere near 50% revshare. In a lot of cases it works out to be around 20% after you factor in all the tracking problems and that many surfers are just going to type that url in that they see on the banner, video, or photo. This is why there are programs converting at 1:200 with typeins while their affiliates average 1:2000. It's a dirty little secret of the biz. I won't even get into shaving or all the other stuff.

Larger programs with their own established brands and traffic sources tend not to need affiliates. Smaller sponsors still tend to need affiliates and in most cases would be crazy to ignore them since it's dirt cheap branding for a pittance.

I think a better question to ask is whether or not it is worth it to be an affiliate within adult today. Many former affiliates are leaving the industry and heading to mainstream. For the ones who remain there seems to be a trend of not relying on pay site sponsors as much and selling resources to brokers or ad companies. I will admit that I make more by selling traffic resources to brokers and selling dating and cams than I make with pay site sponsors. This crossover occurred in 2011 for me.

Aren't Tube sites some of the largest affiliates? The majority of which is content provided by sponsors.

They aren't. That's what they're saying to save face with people they used to make money with. I know of at least two handfuls personally that are just gone. Poof. Told everyone they went "mainstream", when in reality they're back to 9-5 jobs. There is no shame in that at all. But, to watch everyone talk about "mainstream", and that the grass is greener there makes me chuckle. I've been in non adult AM before I was even in adult 12+ years ago, and I can tell you for a fact that mainstream is no better off for an affiliate than adult is these days. Just an observation. :)

The truth is out there....

Affiliate reps are dead. Send traffic or fuck you.

:2 cents:

I've seen that as well but there are some who really have switched over to mainstream and I know it for a fact. There are even some who own free scripts now which collect a percentage of traffic for use of the script who are now sending the traffic they get from adult to mainstream offers because they earn more from them on average. That speaks volumes on the matter I think.

Some might be better off, some not. I have experience with mainstream as well but know enough not to make a blanket statement. Opportunity will vary. Although for those affiliates seeing 1:20,000 in adult with their sponsors I think they are better off doing something else because it's difficult to be profitable under those conditions. It doesn't make sense to promote a sponsor under those conditions. Find another, sell the traffic, or move on to something else.

Part of why I wrote that article is because I keep hearing "the affiliate model is dead"

Paying an independent agent a sales commission is as old as sales itself and will never go away -- there will always be middlemen.

I also see many mainstream guys moving into to adult. I think the line between the two is getting more blurry and we will see an evolution over the next couple of years. :pimp

I think that the moral of the story is this.

Affiliate marketing is much tougher, and requires much more skill and business sense than it did years ago, regardless of what you're marketing.

I think, to be a successful affiliate going forward you have to work smarter, bring more to the table, and make better long term business decisions.

As affiliates, we should not develop a sense of entitlement. The traffic belongs to whoever can harvest it, and convert it best.

As affiliates, we must understand that the windows for making revenues with a particular space/tactic in that space, are not infinite, and we must be able to change courses quickly with minimal effort to prospect new markets for opportunity. We must be a nimble and agile species.

As affiliates, we must aggressively stay in touch with the trends and not become complacent in our skill sets. Never stop being hungry to learn.

As the guys said above, middle men will always be present in any space with opportunity.

My 2cents.

My 3-5 posts for the week have been used up. Back to work! Good wishes all!

hello pimp sir! :thumbsup :winkwink:

not completely dead, just not as good as before.

I refered an affiliate to a program and i was bringin in 12k a month in referalls alone, now im lucky to get $700 a month

There are. But I notice they are usually what I call the "new adult affiliate".

New adult affiliate (one or more of the following) :

- Pirates content or uses pirate content provided from other sources. Looks to sell dating cams or some other non-paysite model.

- Has no money to invest and tends to go for idea's like Pimproll's hosted tube where costs are kept low and usually just beer money is being earned. Not full time.

- Tries to be an "old affiliate" but leaves the industry within six months in 90% of cases.

Old adult affiliate:

- What we all know of in the past. Promotes pay sites. Has legal rights to use content. Respects copyrights. Often full time. Invests in the business more than $10 a month.

The old adult affiliates are becoming an endangered species in adult.

True dat fine sire. :thumbsup

You are left with a lot of "beer money barons" who claim to still be in the industry, but in truth are no longer full time. They instead don the paper hat for their 9-5 to shake down their nut.

:2 cents:

And you know this because?

A better question is.

Is it cheaper to buy traffic from a broker who bought from you than is it to get sales from you direct?

:2 cents:
Ultimately in business it comes down to ROI. Is it cheaper to get a few people to submit to Tubes, TGPs, buy banners and set up blogs, maybe, etc. Than to go on the endless hunt to get a few affiliates who demand so much to send more traffic?

Build your own traffic network and keep it growing or rely on someone who will flip to another person for an extra 5% or nicer banner.

Affiliates will always be here, the position they enjoyed in 2006 isn't the position they enjoy today.

In no way do I blame affiliates for taking advantage of the situation. I blame lazy short sighted sponsors and I only see this now with hindsight. So equally to blame. :thumbsup

Yes. In 2012 adult it's usually not much unlike asking whether or not it is profitable to hire a employee for $1 or $2 an hour. Usually it is. At least for the employer. The question is whether or not it is profitable for the employee. One reason many adult affiliates are leaving is because it's no longer profitable for them in that there is something else they could be doing. Mainstream, flipping burgers, whatever it might be.

In a few years I expect the new adult affiliates will outnumber the old adult affiliates 3:1. Many of the old will leave to other things or become new affiliates themselves. Piracy is a big reason for this. As conversions get worse it makes less sense to push a pay site for an affiliate. Whether sponsors want them or not old affiliates just aren't going to stick around as such when average ctr becomes 2% and conversions are 1:10,000. There's just no profit with that. It'll be like working for $1 an hour for most in that case.

Not dieing what so ever, just the old ways are

I have been in this biz since 1997, 15 years. Yes, it's changing and dying
at the same time. Companies are buying their own traffic for nearly 50% less
then what it costs to pay an affiliate.

In 2001 Rand Pate from Epoch and I sat down at a show, he said.. you watch, the Per Signup model will slowly kill this industry, well.. he is right in my opinion!

I have a lot of experience in this business as an affiliate and have owned a pay site in the better days.

Also remember the tube discussions where people were claiming they were getting double or triple the amount of type ins as compared to people who clicked banners? Why would you think that only happens on tubes such as Pornhub? Practically every sponsor now has a url on their stuff. If the surfer doesn't click that link and types it in then the affiliate isn't getting anything.

It's usually not cheaper because you aren't paying them 50%, you are paying them something like 20%. :upsidedow On the flip side you have to remember that the affiliate can just sell their traffic too. I make more now selling traffic resources in many cases than I do from the sponsors. I still try to push the hell out of my sponsors and do everything legal. Don't get me wrong. But the conversions are less so it's created this scenario. I guess we might expect those rates to go down soon if the traffic is not profitable to someone but so far it seems it is. If everyone's conversions were like affiliates were seeing then that traffic would be selling for 1/5th of what it does now. Obviously that's just not the case.

mainstream affiliates want an easy sale that adult used to give, they also want more adult ish traffic for their mainstream projects.

Yes, it's definitely DEAD, even if some people are still doing some money.

Why is it dead?

Simple. 90% of the adult business is RULED by TUBES, CAMS, and DATING.

TUBES now work with sponsors directly, which means:


BIG TUBES <-> SPONSOR (content/cams/dating) <-> BIG TUBES

So the affiliate is left out of the equation.

We affiliates have no more place in this business and nobody is interested in working with us.

At the conferences, starting around 2007 or 2008, some of the affiliate program owners said more a less the same thing right to your face and on the panels. They could no longer continue to pay staff, and continue to reinvest while paying $75.00-100.00+ per sign up on $9.95/19/95/24.95/mo. memberships that did not rebill. They were simply going to have to bring more traffic in-house.

There were a lot of examples given of whales demanding this and that, which was putting a lot of pressure on the programs to just pay them to keep traffic rolling or lose it. Basically, they have become over dependent on the affiliate whales and the demands were getting harder to meet.

When it comes to memberships and pay outs to affiliates it was entertaining to see just how few managed to actually "think" about how their payouts were even being generated in the first place. It used to humor me when affiliates would be bitching about cross sales, upsells, or traffic leaks and shit after sending a sale to some sponsor. Um.... how in the fuck do you think they were affording to PAY YOU that $75.00/$100.00 sign up bonus?!!?

It does not take a rocket scientist to do simple math.

:2 cents:

lol beer money barons, I love that. My new title.

:1orglaugh

there used to be times where i deeply regretted not to be an affiliate.

looking at my numbers now, and the situation of the affiliate business model, i am quite happy to do what we do :)

Just sell the traffic, popunders, mobiles whatever. :upsidedow

Pushing a bad sponsor:

300,000 impressions * .03 (3% ctr) / 5,000 (1:5000 ratio) * $20 (per sale) = $36.00

Sell 25% of the same traffic:

300,000 impressions * .25 (25% sold) / 1000 * 2.50 (per k) = $187.50

Sell it all 100% (if you are so lucky where you can) :

300,000 / 1000 * 2.50 (per k) = $750

the best affiliates are basically search engine spammers using disposable domains and willing to rebuild over and over again as google changes. there aren't that many who can really do that on a long term basis.

I know the point you're making and I could probably link to threads 10 yrs old where I said sponsors should not give out free content as it is the slippery slope.. However in your scenario the tube is the affiliate. There's just less of them. You could call it a B2B transaction, but it always has been anyway really under TOS.

I never wanted free content or hosting. I certainly never wanted people going into members areas and taking content. I wanted content sellers to only sell hardcore to sites who had a members area behind a CC payment page, to charge a premium for it, and to make their normal money selling the softer content to affiliates who couldnt get it free! People instead thought it would be better to focus downstream of that and try to make tgp2 sites and other things doomed to be too little too late.

But it's all water under the bridge of course. We all have to adapt in some way.

fuck I was just going to make a post about me moving to mainstream.

Just wanted you to know the domain is available if you want it!
No match for "BEERMONEYBARON.COM".
No match for "BEERMONEYBARONS.COM".
:thumbsup

Sorry, mainstream isn't accepting anymore affiliates at this time. Service providers are still welcome.

McDonalds it is :(

Any jackass can push a button on a camera. A photographer needs a camera; An affiliate needs a computer, a connection, photoshop, Dreamweaver, HTML and grahpics skills, PLUS needs the ability to get traffic.

Dating, cams, penis pills... That isn't a barrier. It's a product we sell. Cams is pretty much porn, dating is one step removed; Penis pills and sex toys is porn's cousin and goes hand in hand.

The affiliate model isn't dead, just shrinking, leaving who's left to make whatever is left....

Re-sizing let's call it.

So if you're one of those "surviving" affiliates you may actually see your bottom line profits go UP since competition is less. Then again, work/profit/success is often tied to human effort and motivation, so if you don't see things going up over time you are less inclined to work at something.

I think, in a few years, adult will "stablize" and will reflect several huge companies (planets) with smaller companies (moons) and even smaller individual affiliates (asteroids?) left.

(Ah metaphors! I never met-a-phor I didn't like....)

Anyway, the idea is to be one of those last remaining celestial bodies in our ever-shrinking "adult universe". This will depend greatly, of course, on the stubbornness of the individual affiliate. Some people (bless them) will never, ever give up their freedom to "go mainstream" or "get a real job".

Here's to the Winners - try and be one of them if you can.

The rocket scientists left the building loooong ago.

We love the good affiliates who have been with us many years but without "in-house" we would all be dead long ago too.

Expanding on this, I don't think most people can tell the difference if a photo was shot by an amazing skilled photographer with tens of thousands of dollars in equipment and decades of experience vs an amateur photographer with an iphone. Photographers can tell but the average consumer visiting our sites and converting into sales can't.

I assure you, affiliate marketing is alive and well. Very alive.

ok, good, thank you very much. it is great to hear it from guru as you are

:1orglaugh :1orglaugh

:thumbsup

Fiddy shrinking affiliates.