Challenges of Mobile in the Affiliate industry

I remember going to conferences back in 2006, 2007, 2008.  Every year, you heard the same message:  MOBILE IS COMING!  And, then, another year would pass.  (sigh) No dice.  Here we are in 2014.  Mobile is indeed everywhere.  People seek out ubiquitous and multi-device access on the web.  Mobile device interaction is a factor across a large percentage of e-commerce transactions.  So, what does that mean for the affiliate marketing?

Bottom line:  Mobile is HARD.

The affiliate marketing industry evolved out of a state of economically advantageous circumstances.  It’s hard to beat free traffic.  SEO was a great contributor to the early stage coupon sites.  Affiliates made stupid money off of free traffic.  Then came PPC.

Affiliates were some of the first to master PPC.  Large profits were made.  Fortunes were made.  Over time, the cost of SEM became too expensive.  Profits have shrunk and made it harder for the small guy to get started.  In fact, just about the only affiliates who can compete in SEM in this day are those who are bidding on Trademark plus deals/coupon terms (TM+).

But, in the first 15 years of online affiliate marketing, two forms of traffic have reigned:  SEO and PPC.  And, to a lesser degree, display was a channel for some affiliates.

Outside of these forms of traffic, there was/is one more that – in no way – helps Advertisers.  It merely achieves profits for Publishers – toolbars.  But, that’s the subject of another post.

Let’s talk about mobile – and specifically apps.  Unlike SEM and SEO, Mobile is HARD.  It has high startup costs.  Even if you have a great idea for an app, frankly, the ongoing expense associated with Mobile makes it cost prohibitive to all but a few high volume affiliates to participate.  Companies like Retailmenot have been able to effectively harness their base of customers to encourage mobile app adoption.  But, the number of affiliates who have done it right is a very small list.

So, unless you have a high list to market to in order get app downloads, what are your options?

Incentivized downloads:  Spending $1.50-$8.00/download is certainly an option or is it?  You are essentially HOPING that people actually use your app.  And, if you are getting a 5-12% commission, can you really monetize that?  Large Advertisers may be able to and maybe they can justify it.  But, if you are getting a commission, that’s not exactly a great ROI.

Try to build a brand:  Anyone who has ever tried this would tell you just how challenging this option is – and costly.  Building a brand in order to encourage app adoption is a costly costly proposition.

Then, there is mobile web.  What are the costs associated with getting a good mobile site?

Unless you are building a site with great complexity, the smartest thing you could ever do is to build your site in WordPress, Drupal, Joomla or some other platform with themes that remove the challenges of responsive design.

But, what if you can’t?  What if your site has a bunch of feeds and it can’t be so neatly packed into a conventional CMS?  I guess you could build a site for every device out there.  How many developers are you planning on hiring?  Many?  How costly will it be to turn your desktop site into a good responsive design for SEO?

That’s where I come back to a central point – Mobile plays by different rules for affiliates.  It’s not like SEO or PPC where affiliates see instant profits.  It’s an investment in an uncertain future and an uncertain profit picture.  And, that’s why few affiliates really do it well.  Apple and Android have truly removed the SEO’ing potential for apps.  It’s hard to game Mobile.  And, in an areas where factors cannot be gamed, it’s hard for affiliates to compete with their reduced commissions and confined margins.


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