Search engine strategy -- biggest threat factor to affiliates?

There's this interesting discussion going on about the sustenance of affiliates' revenue and the factors that could affect it.

Obviously a couple of technical issues figure in the list. However, what stands out is the search engine marketing factor. Almost 43% of the respondents in this poll consider search engine strategy and PPC restrictions as the biggest threat to affiliate revenue. Doesn't that give an insight into our reliance on search engine marketing to drive sales?

PPC is not getting any cheaper, and while it is probably still one of the most cost-effective marketing channels, the cost per conversions are only likely to go up as more and more advertisers compete for a clickthrough. Search engine optimization has its own recurring costs that are often underestimated. Yet, simply because of its wide reach, this channel will continue to be an extremely attractive option.

Trouble is, it is also the most likely option for the merchant themselves as part of their own marketing strategy. So, we are getting to a scenario where we could be competing with the merchant instead of complementing to generate the same sale. And you bet, it is a no-win situation for an affiliate, because the cost of acquiring that sale will be very high as a proportion of the revenue that will be generated.

What are the implications of this? I'm not too sure yet, though I believe it will definitely see the emergence of new and innovative strategies from some creative affiliates.

It may also be the beginning of a change in the affiliates' mode of operations itself. Until now, affiliates could get by just driving traffic to the merchant website, without owning the relationship with the customer.

Are we headed towards a model where affiliates own customer relationships? If yes, to what extent?

Until next time,

Ben Flux

posted by Ben Flux - Traffic Junction @ 10/21/2005 08:05:00 AM