Marketers love to create new terms to explain their work. From “brand advocacy” to CPA, CPM, CPE and the myriad of acronyms that fill the digital marketing landscape, we’ll
turn almost any new business practice into a marketable term.
What, then, to call the phenomenon of once beloved — or, at least, begrudgingly tolerated — affiliates being shunned
by the very industry that fervently embraced them? As the performance marketing industry matures, and as brands seek more sophisticated and legitimate agencies and affiliates to manage their online
marketing campaigns, are we entering a period of “Online Darwinism”?
I believe that is exactly what is occurring in performance marketing.
With apologies to Charles Darwin
and his Theory of Evolution, my embrace of the Online Darwinism Theory, a concept I developed after watching so many affiliates drop like flies in recent months, encapsulates my views of the
evolution of digital media and the revolution in digital media providers.
This theory reasons that reputable and ethical affiliate marketers will survive while unscrupulous
ones will go the way of the dodo. There will be more business for great companies that evolve wisely based on clear, measurable objectives that meet clients’ digital-media challenges. Media
pricing will become more realistic as delusional “get-rich-quick” companies continue to exit. All of which leads to more accurate and strategic planning for advertisers who have marketing
dollars to spend.
Dramatic changes have occurred over the last decade in the digital media and online marketing industries. From email and display advertising, the focus shifted to
search and pop-ups; co-reg, incent and paid search got their due focus, and now, everyone’s mind (and marketing spend) is on social media. Encircling these changes was the evolution of
smartphones, followed by the rise of the tablet.
The Digital Age forced marketers to slowly evolve to find people wherever they consume media. Increasingly, this has been within digital
mediums and decreasingly via print, radio, TV and other offline channels.
Life has become a giant skip button. Marketers must engage the consumer precisely in the moment and at the right
spot.
Consider this for a moment: 10 years ago, an email submit had a cost-per-acquisition (CPA) of $0.40; high cost-per-click (CPC) bids on Google and Yahoo! were $0.25; and banners
converted at 30%. Now email submits average $2 CPA; a highly searched insurance of medical term can carry a $100-plus CPC; and most banners convert at less than 1%.
Media costs are much
higher, marketing regulations from media channels and governments around the world have become far more stringent and the marketplace is fragmented. This requires brands and marketers to carefully and
judiciously select a handful of areas they want to focus on versus serving as an all-things-to-all-brands generalist.
Given the tougher regulations and market fragmentation, the individuals
who have survived to the Digital Age have adapted to the changing markets. Certain characteristics stand out, including multiple streams of revenue, moving into new media channels and partnering with
other companies to round out capabilities.
Those who have gone out of business continued to follow a path of risk-laden financial greed, noncompliance and specializing in one area, such as
social or email marketing.
My belief in Online Darwinism stems from the excitement I get out of watching digital nature take its course. Despite working in an industry relatively far removed
from science, it is clear to me that that basic tenets of Darwin’s Theory of Evolution hold true for performance and online marketing.
The good affiliates will thrive while the bad ones
will die off. It’s as simple as that.