The Life Cycle of an Affiliate Offer
Knowing the life cycle of a particular niche offer can give you a real advantage as an affiliate. Many times affiliates find a particular niche offer that is extremely profitable for them, but eventually the offer dies out. It is important to understand the common life cycle pattern for a niche in affiliate marketing. You want to be able to diversify if something may be falling off soon or if there is a new “hot” offer you should get your hands on soon. If you are able to understand what stage in the cycle the offer is at, it may be easier to get in, you will know if it is time to shift focus to another offer, or if the niche is long term and profitable start testing other offers in that niche.
Here are some common life cycle patterns for offers in affiliate marketing. Of course, this is subject to the offer and niche, but these patterns should be helpful in spotting the stage of the cycle for several affiliate offers out there:
1. Offer comes on to the scene.
2. Top affiliates get their hands on the offer and start running successful campaigns across several traffic sources
3. Word gets out to other affiliates, and they start running traffic
4. Traffic sources become saturated with tons of affiliates and bid prices typically go up
5. Margins being to decline
6. Fraud becomes an issue and Merchants enforce stricter terms and policies
7. Profitability declines
8. Consumer complaints (reasons vary) and consumers less responsive to ads
9. Offer reaches a plateau
10. Gradual decline until merchant stops running affiliate traffic
As I mentioned above, this is all dependent on the offer and/or niche. There are certain niches that have been around for years and have yet to really slow down, but more often than not an offer is dead within a year.
So what should you do? If you are able to realize where a niche is at in its life cycle, you can take a strategic approach to running the offer. If it is in the beginning stages, you may take a slower and more centered approach by building up a quality PPC campaign. When the offer is in the early stages, keyword bids are significantly lower. Once the competition sets in and several affiliates are running the offer, your CPC will go up, so get a campaign up and running while it’s still cheap! Also, during the beginning stages you can set up campaigns more quickly with looser rules and are less likely to have any banned accounts.
If you decide to run an offer during its later stage in the cycle, you will want to branch out and test different types of traffic sources beyond PPC (SEO, banner, etc.) If you have a lot of experience in one niche, but a particular offer seems to be at in its final stages start testing out other offers in that same niche. If you can, try testing multiple offers in the same niche category before any of them dies off to be safe.
The most crucial stage to keep an eye out for is when a particular offer or niche is on high watch for fraudulent traffic. Next thing you know your AdWords account has been reviewed and shut down because you had one non-compliant ad or keyword. When merchants start enforcing stricter terms and policies because of fraud, an offer can die almost overnight!
The best thing to do is to be a forward thinker and not follow the crowd. Use your resources to find out what the newest, hottest offer is before others do. Realize that you should not get too comfortable in one area. Planning and preparation is key, because things change at the drop of a hat in the affiliate world. Do your research, diversify, and stay in the game!