Affiliate marketing is, to reuse a quote from the guys behind Spreedly, a "star search.". Many will enter, few will win. You keep the barriers to entry low in the hopes that you find one of the comparatively few professional affiliates who know what they are doing, as opposed to more numerous people who either intend to put a single link on their blog or, worse, have recently bought a Make Money Online ebook.
What successful affiliates are doing is very frequently some shade of gray, which is one of the reasons to have affiliates in the first place - plausible deniability. [Edited to add: a well-designed affiliate program also generates organic SEO benefits, and this facet profits even from a single link on an unremarkable blog, when that gets duplicated at scale.]
(Un)Fortunately for woot, the professional/slightly greyhat affiliates are not going to bother building campaigns that compete with Amazon and eBay for a piddling percent of sale commission .
The only affiliates they(and 99% of the other programs on CJ) will attract are the newbs who will put a link on their blog or maybe try to SEO an article they wrote.
No individual affiliate of theirs is going to make a lot of money, but maybe the aggregate total of millions of Woot's customers referring friends to Woot through Twitter, Facebook, etc will increase their traffic.
In other words, amateur affiliates make pennies, Woot wins. Especially if affiliates have to reach a minimum commission threshold before they get paid.
I've worked for an affiliate marketing company, and some of the highest earners do truly earn impressive amounts (tens of thousands of dollars a month). You are also incredibly right about the shady business that goes on in this industry. In my opinion, the most profitable and highest conversion campaigns are always the most gray. The fact that many advertisers usually require a landing page (rather than a direct link) is really fishy by itself.
I used to make a healthy living designing landing pages for affiliates. Several of my clients were making several million a year (all made a "healthy" living) and I was bringing in several hundred a day from just designing landing pages. I left because I couldn't handle that "gray area" people talk about, but I swear those are some of the most intelligent and hardest working people I've met. Shame many are missing that deep entrepreneurial spirit many here on HN have.
5) "This offer is only available if you subscribe via this special link before 12pm on [script returning today's date]"
6) Essentially worthless "make money fast" products that are little more than product-based pyramid schemes shilling the opportunity to make money by signing up themselves to marketing the "product" to other suckers
7) Virtually anything related to casinos - especially the ones purporting to explain how to "beat" them (and amongst those, especially those providing information on how to churn casino bonuses playing blackjack that's actually accurate)
I was referring more to the black hat tactics many affiliate employ successfully. That as well as how many affiliates can easily shark a product with negative smear campaigns and SEO tactics to remove their competition from top Google spots. A reason you see many sites with generic Google listings in the first 10 results.
Go to any mainstream web site frequented by an older, less tech-savvy audience like weather.com. Take a look at the text ads on the right side and the landing pages they link to.
There's your crash course in the current state of the affiliate marketing industry.
Most of the top affiliate Marketers out there use "mom blog" or "coupon sites" like fatwallet to generate "massive" revenues. In oder word they build a platform that they can use with affiliate marketing or direct business with potential advertiser. not everything is shady out there but you should never buy a make money online ebook or something like... Anytime someone tell you affiliate marketing is easy then run as far as possible from this person... now you know
Actually, most of the top affiliate marketers make money by arbitraging paid or organic traffic. Very few are creating sites that are much more than thin landing pages.
In most cases, the only reason an affiliate will send a viewer to a landing page is AdWords' strict rules about arbitrage, or some other rules set by the affiliate network. Google wants to provide its users with as good of content as they can manage, but they know affiliates are a large portion of their AdWords spenders. It's a delicate balance.
Many affiliates send users to landing pages or their own sites for their own tracking and data collecting purposes as well.
I did very well myself with affiliate marketing. The trick (if you want to do affiliate marketing and still feel good about yourself) is to provide some value add.
So when I started iPadCaseFinder (now owned by someone else and changed into a storefront), I built a really cool 'finding' application so people could find the perfect iPad cases for them. It earnt pretty well!
I think the disagreement most people would have with this approach is that you're coming at it from the wrong side. It's money first and then "oh yeah, I'd better add some value."
You're wrong, I decided to found this site because my friend dropped and cracked my iPad, and I couldn't find any suitable cases. The site was inspired by a true life problem, and I know 100's of people that found it very useful.
Pretty funny, and interesting that this comes from an Amazon company, Amazon having pioneered the online affiliate industry and finding much success in it. Still, It's a pretty accurate portrayal of the whole affiliate scheme, and I think it might have the effect of keeping away the low-value affiliates while not deterring those who could actually provide a mutually beneficial relationship.
I wonder if anyone at woot had the groupon idea (before groupon came out) but was quashed because it just wasn't woot-like. It seems like woot lost a couple orders of magnitude of scale by (apparently) making themselves the fulfillment bottleneck.
They're both important. I'm never sure I'll use a groupon when I buy it, but I can always be talked into buying a gadget if it's cheap or a shirt if it strikes my fancy.
it's actually a 50/50 proposition...many affiliates who actually make sales(besides the few rare super affiliates), do so by simply ranking for the first page as "[brand] review, since that way they reach the customer just before they hit the buy button
So as an advertiser, you basically just end up paying money for sales that would have been yours anyways
What successful affiliates are doing is very frequently some shade of gray, which is one of the reasons to have affiliates in the first place - plausible deniability. [Edited to add: a well-designed affiliate program also generates organic SEO benefits, and this facet profits even from a single link on an unremarkable blog, when that gets duplicated at scale.]