Is Affiliate Marketing Dead?

Affiliate marketing has been around for a while and it’s been quite successful. Even though the concept has been around since the 17th century, it really took off when companies like Amazon and CDnow brought it into the digital world back in 1990.

Once it gained traction, affiliate marketing totally changed how marketing works by offering huge potential. Lots of people made tons of money through affiliate revenue in the heyday.

But lately, some folks are saying affiliate marketing is on its way out. However, you can’t just dismiss a $12 billion industry overnight.

Many still have faith in affiliate marketing. They’ve got reasons and explanations to back up their beliefs. Whether you’re just starting out or you’re a pro in the game, it’s important to explore all angles.

In this article, we’ll look at the arguments for and against affiliate marketing being dead or alive. Only then can we come to a conclusion about its fate.

So let’s dive right into the discussion!

Why Do Some Think Affiliate Marketing Is Dead?

Now, let’s go over the main reasons why some folks believe the affiliate marketing industry is finished and see if their arguments hold water.

1. Growing Competition

Competition in affiliate marketing is fiercer than ever. Since its early days on the Internet, it has become a popular way to earn money online. With platforms like Amazon Affiliate and user-friendly tools like WordPress, getting started has never been easier.

Nowadays, even big brands and well-known publications are diving into affiliate marketing, often dominating lucrative markets and keywords. Publications like Forbes and The New York Times have affiliate hubs on their highly authoritative websites. If you search the keyword ‘Best Online Brokers’ on Google, you will see an article by Forbes Advisor ranking at the top of the page. It tells you right up front that they’re using affiliate links.

Forbes Advisor

But despite the crowded field, there are still opportunities for savvy marketers. By focusing on niche audiences overlooked by the big players, there’s room to thrive.

The internet is vast, and clever marketers can use targeted content and unique value propositions to find profitable niches amid the competition.

2. Tougher Rules and Regulations

Privacy laws worldwide are getting stricter and more widespread. Each new standard brings fresh guidelines that websites must follow.

For example, Europe has GDPR, the United States has CCPA and others, and Canada has PIPEDA. In the U.S. alone, the IAPP Privacy Legislation Tracker shows that there are privacy laws in 16 states, with more states considering or proposing bills.

Big brands like Amazon and eBay also have their own rules for affiliate disclosures. Keeping up with all these regulations can be a real hassle for affiliate websites.

3. Selective Brands

As competition grows, brands are becoming pickier about their affiliates. Screening processes have become stricter, making it tough for newcomers to meet the criteria.

New affiliates might have good content and engaged audiences, but they often fall short on minimum sales, email list size, web traffic, followers, and marketing budgets that brands look for.

This is particularly true for top-tier affiliate programs. Rejections are common, even on the first attempt. For instance, here’s a rejection email I got from applying the Udemy affiliate program.

a rejection email

4. Changes in Amazon’s Commission Structure

Amazon is the go-to affiliate network for many people starting out. It offers products for almost every niche, which is why it’s so popular.

However, Amazon keeps tweaking its commission rates, and they’ve been going down in recent years. This means creators are earning less from Amazon over time, squeezing their profit margins.

For example, between 2019 and 2023, Amazon reduced commissions for many popular product categories. Some categories saw cuts of up to 50%. These changes have led some to believe that affiliate marketing’s prime days are over.

Changes in Amazon's Commission Structure

5. SEO Impact on Profits

Google’s constant algorithm updates can shake up search results, affecting your site’s organic traffic. This means you might need to scramble to maintain or improve your rankings by updating your content.

However, if you have great evergreen or targeted content, you might benefit from these changes.

Regardless, fluctuations in traffic can directly impact affiliate commissions. If your visitor count drops, so will your affiliate revenue.

A stark example of this is Honestbrandreviews.com. They saw significant traffic growth from 2021 to 2023, but got hit hard by Google’s Core Updates in 2023.

Honestbrandreviews.com

They lost millions of monthly visitors to their product review pages, which were all monetized with affiliate links.

6. AI Impact on Affiliate Marketing

Since the launch of ChatGPT in late 2022, AI has revolutionized affiliate marketing in several ways:

  1. Faster and Cheaper Content Production: AI tools help create content more quickly and at a lower cost.
  2. Quicker and More Thorough Research: AI aids in conducting research efficiently and comprehensively.
  3. Content Idea Generation: AI assists in generating ideas for content creation.

However, AI also brings new challenges for affiliate marketers, such as:

  1. Increased Competition: With AI, anyone can easily scale content production, leading to more competition.
  2. Quality and Accuracy Issues: Although AI tools are widely used, they may still have issues with quality and accuracy. Providing proper context can help address these challenges.
  3. Threat to Traffic: Search engines like Google and Bing now incorporate AI-generated answers into search results, potentially affecting website traffic.

Overall, while AI offers many benefits for affiliate marketing, it also requires marketers to adapt to new challenges in the evolving landscape.

7. Scams and Trust Issues

Affiliate marketing attracts quick-money schemes that target content creators. These flashy campaigns can seem sketchy and cheap, eroding trust in the industry.

Some programs are outright scams, while others are just rehashed old ideas. Even legitimate programs in adult niches like porn or gambling can be shady, trying to trick you into promoting illegal or fake products.

These schemes tarnish the reputation of affiliate marketing as a whole.

Take StealthGenie, for example. It promised big commissions and easy SEO keywords but turned out to be a mobile spyware app that violated federal laws. The FBI shut it down in 2014, and its CEO faced hefty fines.

StealthGenie shut down by FBI

To make matters worse, people often confuse affiliate marketing with multi-level marketing (MLM), but they’re totally different in terms of legitimacy.

Why Affiliate Marketing Isn’t Dead?

After reading through the discouraging reasons why some say affiliate marketing is finished, you might be feeling skeptical.

But the truth is, affiliate marketing is very much alive and kicking. There are numerous convincing reasons why it’s still profitable to start an affiliate marketing business today.

1. Lower Technological Barriers for Affiliate Marketing

Here’s some good news for creators: the technological barriers to entry are lower than ever.

Nowadays, there are powerful and user-friendly market research tools like Ahrefs and Semrush. These tools provide detailed data that was hard to come by just a few years ago. For example, Ahrefs’ free keyword generator helps you quickly find the volume and competitiveness of any term you’re interested in.

Ahrefs' free keyword generator

WordPress and similar web publishing tools have also become more user-friendly. Many web hosts now offer 1-click WordPress installation, allowing even beginners to set up a complete site quickly.

However, the downside is increased competition. With technology no longer a hurdle, pretty much anyone with a computer can jump into affiliate marketing. The key challenge now is making your content stand out amidst the competition. To succeed and generate substantial revenue, your content must be unique, high-quality, and optimized for SEO.

2. Growing Affiliate Marketing Spending

Despite the challenges of becoming a successful affiliate marketer, there’s ample evidence that it remains a popular and effective way to earn passive income online.

In 2022, global affiliate marketing spending surpassed $12 billion, according to Influencer Marketing Hub. They project this figure to exceed $14 billion in 2023 and reach $15.7 billion in 2024.

The Google search trend for “affiliate marketing” over the past five years also indicates its increasing popularity.

Google search trend for "affiliate marketing"

3. Increasing Affiliate Revenues

Affiliate marketers are seeing their earnings rise. According to Authority Hacker’s survey, the average affiliate makes over $8,000 annually, with top earners bringing in six figures monthly, and some even making over $500,000 per month.

These substantial profits demonstrate that the affiliate marketing industry is far from fading away. Despite occasional adjustments in commission rates by companies, the overall opportunity continues to expand, driven by the growth of online shopping and content marketing.

So, don’t count affiliate marketing out just yet. Successful bloggers and marketers are still cashing in big, proving that reports of its demise are premature. There’s still plenty of money to be made for those with influence and initiative.

4. Small Publisher Can Still Win Big In Some Niches

Despite challenges, small publishers can still compete in niches with strong affiliate programs.

Many smaller niches offer low competition keywords with buyer intent. Even in competitive niches, focusing on a narrow slice can lead to success, as big publishers often overlook smaller keywords.

For example, The Daily Dog, with a low Domain Rating, ranks well for lucrative keywords, even outranking Amazon in some cases.

The Daily Dog

For example, for the keyword “PetHonesty Advanced Joint Supplement review,” it ranks on the first place.

"PetHonesty Advanced Joint Supplement review" search results

5. Growing Popularity of Non-Amazon Affiliate Networks

Amazon’s popularity among affiliate marketers has declined in recent years, as shown by data from BuiltWith.

Meanwhile, affiliate networks like AWIN and ShareASale have seen significant increases in usage. This shift suggests that affiliate marketers are transitioning to other programs as they mature.

AWIN and ShareASale

However, despite the decline in Amazon’s usage, it remains the most popular affiliate program by a wide margin. This is because:

  1. Amazon offers products in almost every imaginable niche, making it a potential revenue source for most blogs.
  2. Marketers earn commissions on any purchases made on Amazon within 24 hours of clicking an affiliate link, not just the linked item.
  3. Consumers trust Amazon and spend large amounts of money on the platform. According to a 2021 New York Times report, Amazon surpassed Walmart in consumer spending, with an average of over $610 per person in the previous year.

Despite decreasing commission rates, the significant amount of spending on Amazon presents the potential for substantial affiliate returns.

6. You Can Leverage AI for Affiliate Marketing

AI brings both benefits and challenges to the future of affiliate marketing.

On one hand, some users are turning to AI instead of search engines, which could decrease click-through rates for top-ranking sites like Google’s new Search Generated Experience (SGE).

However, AI also speeds up content production, allowing creators to scale quickly. For example, a case study on X (formerly Twitter) showed how AI helped a site publish 300,000 new posts and draw 30 million visits in just 4 months.

A case study on X (formerly Twitter)

While AI may reduce traffic for some sites, consumer interest in trusted third-party advice can offset this. As affiliate sites excel in providing such guidance, the long-term outlook remains positive.

Final Thoughts

Despite doubts about its future, affiliate marketing is far from dead. Industry insiders and market forecasters overwhelmingly express optimism about its prospects.

However, to thrive in the AI era, affiliate marketing strategies must evolve.

My recommendation? Focus on building a trusted and respected brand. Websites solely focused on SEO for cold traffic may struggle as AI becomes more prevalent in search results.

By establishing yourself as a leading authority in your niche, you’ll likely flourish.

If you need more guidance, sign up for my online business coaching

Interested in receiving one-on-one mentorship for building an online business? Join my online business coaching program.

Leave a Comment

1-on-1 Online Business Coaching Program