Why Affiliates Can Still Compete With The Big Boys

Posted by Alexander Tsatkin

May 15, 2008

I am going to take a quick break from the 30 Sites in 90 Days Challenge to talk about why I think affiliate marketers can compete with the big boys, even in high CPC categories. This theory is pretty much the basis of why I am doing the challenge in the first place and why I think it will succeed.

As an affiliate marketer your goal is profit. You do not care which product gets sold as long as every entrant makes you money, hopefully in aggregate more money than you are spending on advertising. I was able to wrap my mind around this theory when one of my clients had asked me how it is possible to sell other people’s good who are also running PPC, SEO, and other marketing programs when their margins are much higher than yours per sale.

Here is how I see it. When someone searches for “portable memory” we have no way of knowing what that person is looking for. Are they looking for a USB drive or a backup drive. Maybe they are looking for a memory chip to put in their camera. Each manufacturer is going after this term hoping that the person is looking for their product. The searcher ends up clicking on a few ads costing the advertiser money. He may go through 5 ads before he finds exactly what he is looking for.

This is not to say that the searcher knew exactly what he was looking for. Many people start searching before they know exactly what is out there. Lets face it if you knew exactly what you wanted you would just type in the exact product. This is the crucial reason why an affiliates can still beat the big guys.

An affiliate can set up a micro site all about “portable memory.” You can even bid high and pay a lot for the click because of this next crucial step. When the searcher arrives at your site, instead of seeing one offer for one type of product he is greeted by all sorts of information. From reviews, to glossary, to a price comparison. This searcher has no reason to bounce from your page because this site will help him articulate his thoughts into exactly what he wants.

You can subsidize that initial click by placing CPM banners and create a site that encourages page views. You can even place AdSense so in case the person doesn’t find what they are looking for they will be more likely to click on a link to take him elsewhere instead of go through Google Search again. If this was a category where news are important you can have that person subscribe to your RSS or Email list to receive updates and of course great offers. You can even have the person explore the different distributors by placing affiliate links and making sure he gets cookied each time he visits any of them. This way the next time he does conduct a brand search and makes a purchase you will get a cut for educating that consumer. Once the consumer feels educated he moves on to make the purchase, and if you make that part of the step easy they will do it from your website collecting you cash.

Basically even though you are only receiving 10 to 20% of commission for every sale you are a lot more flexible in how you monetize that traffic. Big brands can’t advertise on their landing pages, and therefore as long as creative affiliate marketers exist, they will always be able to compete with the big boys.