What are they?
Affiliate links are a way for publishers to make money by referring traffic to other websites. Usually a purchase has to be made in order for the publisher to make any money.
Amazon has a very large and successful affiliate program. Since Amazon has so many items listed on their website, it’s easy for publishers to find products to link to, and hopefully earn commission.
Any revenue stream for internet publishers is welcome. With the widespread and increasing adoption of ad blockers, it is becoming more challenging to monetise solely through advertising. Affiliate links are quite robust in this regard.
It is possible for the publisher and retailer to be perfectly aligned too. If the publisher wrote an article recommending a TV, and links to a retailer selling that item, then it’s a natural fit. This is in stark contrast to a lot of banner advertising, which often has no link to the content of the page - for example, an advert for a new car, on the review page for a TV.
Of course, it’s also a good deal for the retailer. They only pay out when a purchase is made, making it a worthwhile expense. It also avoids the click fraud that happens in a pay-per-click model, where publishers are rewarded just for referring traffic, irrespective of whether they subsequently buy anything.
Adding affiliate links to a webpage can be tedious. Also, investigating all the different affiliate programs out there can be time consuming. There are automated alternatives like Skimlinks, which take away a lot of the hassle.
Any business built around affiliate links will need to frequently refresh their content to ensure it remains relevant. A webpage featuring the top ten TVs should change as new products come on the market, and so will the corresponding affiliate links.
Sometimes the best product won’t be part of any affiliate program, which causes a conflict of interest for publishers which rely on it as their primary business model.
I’m sure everyone has come across a website claiming to list the top ten of a certain product (for example the top 10 website hosting providers) which just link to the products offering the most lucrative affiliate programs, irrespective of whether they’re actually good or not.
Also, the publisher has no control over the rates offered by the affiliate programs. If say Amazon reduced the compensation it offered per purchase, the publisher would have no recourse. At least with advertising they sometimes have the power to set rates (assuming they’re selling ads direct to buyers, and not using a third party ad platform).
Are they a viable business model for publishers?
They’re good as part of an overall mix. Any website which relied solely on affiliate programs would have to be pretty heavily optimised for that purpose. It’s not enough to just throw in the odd affiliate link.
If adblockers were to become completely pervasive, I don’t think affiliate links are the sole answer to monetising content on the web, but over time they will likely play a larger role.
At least until the web has support for micropayments where publishers are rewarded with small amounts of money per page view, which has been very slow to materialise.