Affiliate Marketing Decay: Is Affiliate Marketing Really Passive Income in 2012?

January 16, 2012 - by admin · Filed Under Affiliate Marketing Articles 2 Comments 
Be Sociable, Share!

    One of the joys of affiliate marketing is that you can build sites, SEO them and then leave them to generate revenues from $100 up to $10k per month all on their own.

    This won’t work in every niche, but I do have a quick affiliate site I put together that’s made $500 per month for over a year now, and I haven’t updated it or invested in SEO since 2010.

    But then again the world of affiliate marketing and SEO is changing, and I doubt this same strategy could be applied in many other niches.  In this article, I want to have a quick think about the “decay” of passive income in affiliate marketing.

    Increased Competition from other Affiliates and Operators

    The ever-increasing presence of other affiliates and operators joining the game can reduce your traffic and rankings over time.  It goes without saying that where there’s money to be made, you’ll always have competition.  A lot of operators also use their affiliate stats to analyse which affiliate’s keywords convert the best, and they can then use this information to invest in their own SEO campaigns and outrank you in the search engines.

    Technological Changes in SEO and Google Updates

    Every time Google launches a new algorithm update it can reduce the rankings of your site, especially if you have a thin affiliate site or you’ve used obvious black-hat tactics to trick the search engines.  Over the last 5 years Google has released a number of significant updates including the Caffeine Update, Florida Update, Farmer Update, Panda Update and the Freshness Update, all of which have impacted affiliates in one way or another.

    What you should learn from this is that a) just because you rank no.1 for a term doesn’t mean you will next month and b) there are always risks when you buy a site based on x months income because that income could be lost overnight.

    Industry Shakeups, Affiliate Programs Changing their Terms and Conditions or even Shutting Down Completely

    It’s amazing that I’ve only been an affiliate for around 2 years yet I’ve seen so many operators shut down, screw over affiliates or just become impossible to work with.

    Every time an operator changes their terms and conditions it can have three massive consequences for affiliates – a) at the very least affiliates will have to go through their sites, change which programs to promote and renegotiate commissions (potentially with new operators that have a much lower conversion rate); b) they might run out of options of programs to promote in a certain market; and c) they might have to start from scratch ranking for new operator keywords in Google whilst their old rankings become worthless.

    Every time there’s a big shake-up in an industry, there are winners and losers.  The winners tend to be the ones who react to the changes fasest and take advantage of huge opportunities.  For example, I know a number of young, hungry and proactive poker affiliates who made an absolute fortune inside the first week of Black Friday when PokerStars, Full Tilt Poker and UB Poker all closed down and US poker players looked for a new home.

    At the time this happend, I was actually on holiday (enjoying my “passive income“) and failed to take advantage of the opportunity.  Thus, taking a backseat in your affiliate business can have a hugely detrimental effect, while the young, alert affiliates make their millions.  I know for a fact that one poker affiliate made over £1 million during the first week of Black Friday from earning thousands of CPA commissions by signing up US poker players at new sites.

    Conclusion on Affiliate Marketing and Passive Income

    I think a lot of people will agree with me when I say there are lots of affiliate sites on the internet that are making a lot of money (i.e.$1k+/month) with absolutely minimal input from their owners.  In addition, plenty of “super affiliates” that are earning $10k+/month have found a way to semi-retire to Cyprus while successfully outsourcing their SEO campaigns, social media and content to keep their sites freshly updated.  However, I don’t think we can call this passive income in the sense that it won’t disappear over time.  At the very most, it’s lazy income that still requires some  form of weekly monitoring and investment of time from owners.



    Follow Me on Twitter @AffiliateFYI for Even More Affiliate, Business and SEO Updates!

    Be Sociable, Share!