This is Me Sounding the Affiliate Alarm

Your tray table may be used as a flotation device.

Hello and welcome, happy (belated) New Year to all.

It’s time to talk about the Google apocalypse and what it (may) portend for the broader affiliate ecosystem.

I haven’t seen anyone discuss this yet, other than to note that affiliate tech & agencies haven’t seen the same layoffs (yet).

For the last few years, there’s been a palpable “buzz” around affiliate as an inexorable growth trend.

Affiliate is certainly more durable and aligning than programmatic ads (god save them).

BUT, the longer the search landscape remains a wasteland of Reddit, Quora, LinkedIn, and fractured intent (or outright spam)… the more likely we are to see some significant impacts.

I’m still bullish on performance marketing as a model. I just don’t think the industry is fully baking in mid-term risk.

Examining the Google Search Washout

One of the big stories in media is the fallout from Google’s string of brutal Q4 2023 updates, starting at the end of September.

Almost every niche editorial site has seen a drop in organic search traffic and even some large industry stalwarts. I cover this a lot in my Niche Media Publishing newsletter on the publisher side, but what about for the larger ecosystem?

If we examine the broader affiliate ecosystem, there may be some significant downstream secondary and tertiary effects for both affiliate agencies, brands, and the software supporting publishers (and affiliates).

Infographic courtesy of Martech Record: Download Full Graphic Here.

The obvious FIRST ORDER impact targets are publishers reliant on Google for any significant portion of traffic.

This has been well covered elsewhere (see my companion Niche Media Publishing newsletter).

While small pubs are bearing the brunt, some major media companies (Future PLC, DotDash, Red Ventures) are showing wobbliness. Red Ventures is rumored to be shopping CNET (at a steep discount due to declines), and the publicly traded IAC and Future are projecting modest search traffic declines into the future.

Their proposed “fix” is to diversify traffic to make up for Google headwinds.

Pinterest, YouTube, TikTok, Insta, Facebook, etc… could all see some additional attention.

Some indie publishers have even pivoted entirely to Facebook traffic for some sites.

This is all well and good if programmatic ad revenue is the game. But for buying intent, social channels have never been as good as Google Search traffic.

You still need to interrupt people watching cat videos and checking in on grandkids on Facebook.

The immediate washout effect for the affiliate ecosystem is that publishers may dedicate more budget to “alternative” traffic sources that have MUCH less buying intent than Google Search.

Viral “made for social” content tends to go hand-in-hand with programmatic. That’s not to say it’s universal. There are some pockets of opportunity for affiliate plays on platforms outside of Google. It’s just a lot less lucrative, established, and proven.

Second Order Effects of the Publisher “Wipeout”

The SECOND ORDER effects are where it gets less obvious, but more interesting to examine.

This deserves more attention as a potential area of concern as we head into Q2, 2024.

1. Affiliate Agencies: Agencies may see the most immediate impacts as brands start asking the hard questions as to why clicks and sales are down. Most agencies spend a LOT of time ramping up partnerships and may not be able to pivot fast enough to publishers & influencers on other traffic platforms. That said, agencies with downstream channel diversity (or with multiple service offerings beyond performance), may weather the storm in better shape.

2. Affiliate Networks: The networks themselves may also face headwinds if the Google drought extends into Q2 for similar reasons, but potentially with more lead time than the “what have you done for me lately” agencies.

3. Affiliate Tech (Publisher Side): I do think ALL tech enablement platforms face some turbulence, but publisher-facing tech faces the most immediate threat as publishers are their primary customers. Conversely: Affiliate tech that helps IDENTIFY potential publishing partners may see an uptick as brands & agencies scramble to find replacements for longtime Google search stalwart.

Some of the wonderful advancements in affiliate tech may be in for a rough ride.

Affiliate enablment platforms like Lasso, Affilimate, Trackonomics, Genius, must be seeing some absolute declines in clicks / volume and this may show up in canceled or downgraded plans in Q2 (if the current Google climate holds).

But there are some interesting counterpoints to this narrative worth considering:

1. Google may re-align in publishers favor. There’s many indications from Google (including their own Search Liaison) that changes are around the corner. There’s no guarantee that these will be helpful for publishers, but if they address the spam problems and throttle back user-generated content (like Reddit, Quora) even a bit, publishers stand to benefit.

2. People still need reliable information around purchasing decisions. There’s some indication that Google Search itself is losing mindshare due to it’s “improvements” of late. That said, it’s hard to say where users can go for helpful, well-thought out recommendations. Reddit is already getting spammed and there’s even less verifiable “experience, expertise, authority, and trust” from anonymous users spouting off on whatever strikes their fancy. A website is still one of the best ways to publish reviews and build trust with an audience, even if traffic distribution is in flux.

3. Influencer vs Affiliate marketing. There’s still a broader market for creators and influencers in need of tools, networks, and partners to monetize attention. Think: TikTok, Instagram, YouTube. These platforms aren’t seeing the same turbulence right now and many traditional publishers will start shifting budget into these platforms if there’s ROI (and it’s all relative to Google). Affiliate networks - specifically - are less tied to websites and “link infrastructure” can often be useful on third-party platforms.

So How Can the Affiliate System Prepare?

If I were to hazard a guess, Q1 and Q2 will be soft for affiliate enablers, led by a media industry in flux.

Some of these downstream effects take some time to realize and show up in earnings reports after the fact.

Like many publishers, we are hoping (dare I say expecting?) a Google course correction.

But we can only hold out so long before circling the wagons and decreasing (or shifting) budgets.

As a publisher, I’m looking to diversify traffic and platforms in the following ways:

1. Email Lists / Newsletters: A subscriber is durable in a way that Google visitors are not. Developing a long term relationship with opted-in readers is a SLOW burn, but insulated and “moat-like” over a long time horizon.

2. Reddit: I’ve been spending a lot of time trying to figure out Reddit, both as a social network and search engine. In some ways, it’s easier to publish on Reddit as there is instant domain authority. I could see a rise in “Reddit first” publishers, similar to how Buzzfeed leveraged Facebook early on.

3. Pinterest: Pinterest is in many ways the MOST similar to Google, with a similar algo quality. There’s still channel risk, but the INTENT profile is much higher than other social platforms like Instagram, Facebook, etc…

4. Expanding Video: Video - specifically YouTube and TikTok - have long term tailwinds and a different algorithm to optimize for. Note: the risk is very similar to Google Search, it’s just different. Affiliate tools for video aren’t as well established.

5. Facebook: Facebook isn’t great for high-intent traffic, but can be scaled quite rapidly with paid audience building. Probably more of a programmatic ad play at this point, but some downstream affiliate opportunity.

6. Forums: Forums seem to be back in vogue and there’s some intersection with the community-building macro trend that make them an interesting play. I’m not thinking about launching a bunch for stand-alone forums anytime soon, but may experiment with adding to already established publications. Adding affiliate monetization is different in a forum vs editorial content.

Agencies, networks, and affiliate tech platforms should reach out to their publishing partners to better understand what THEY are doing to mitigate this near-existential threat. But hopefully my list is a starting point.

Adapting WITH publishers will be key! The time to act is now.

While the Google gravy train has enabled a remarkable maturation of the affiliate + publisher ecosystem over the last decade, it’s still fairly channel-specific to “Google search-based” models.

Where are the affiliate tools for email lists, newsletters, subreddits, Facebook, Pinterest, YouTube, and forums? Which agencies and networks are leaning into these platforms and the publishers / creators who live there?

In other words, how can we make affiliate work better in a more fragmented traffic landscape?

Hopefully “the website” is still part of the conversation, but it may LOOK very different than it does today.

Best scenario, Google comes to their senses and we’ve created a more resilient and diversified ecosystem.

Worst case, Google maintains the current search status quo and we move through the painful transition period more quickly.