Affiliate Marketing Isn't Broken; Your Risk Tolerance Is Weak

A recent article in Entreprenuer, written by Eric Samson, suggested that affiliate marketing has changed (and dramatically) for the worse.

Samson argues that most of the affiliate action has morphed into massive coupon affiliate sites. Not to rain on the digital parade here, but the highest performers have always been larger sites - the names have changed certainly but the practice hasn't changed at all (I say that based purely on my nearly 20 years of experience with Internet marketing).

Samson suggests that ecommerce marketers, who should be pursuing incremental sales (no argument there), are paying twice as much with coupon sites. In reality, nothing could be further from the truth. Affiliate marketing should not be seen as a direct sales channel - but rather as an "initial awareness" channel for the company using the tactic, as well as for its products or services.

Samson is reallty addressing coupon abuse, rather than the practice of affilaite marketing - which does not require merchants use coupons at all. What it ultimately shows (at least to me) is that there is some confusion in everyone's part about how the practice works most effectively.

What affiliate marketers (whether coupon site or mommy blogger) provide is an opportunity to extend reach, drive awareness and "eventually" generate repeat conversions. It's unlikely that the same user will ever follow the exact path taken previously. It's ludicrous, really, for Samson to suggest otherwise - and suggesting that merchants load up their websites with coupons for their existing is not only silly, it's downright dangerous to the bottom line of the business (all the hard work of acquisition has been done!).

Ask any business owner (digital or otherwise) and they will likely tell you that it costs more to acquire a new customer than retain them. Once that initial contact is made, users will more often than not go direct to source - that means directly to your company. Since most businesses have a limited reach, affiliate marketing (and the coupon sites that drive the most traffic) should definitely be part of your broader customer acquisition efforts. You might pay more today, but if you can earn a users's repeat business, the lifetime value will far outweigh any initial cost.