Reasons affiliate marketing does not work are:
- Low-Performing Niches
- Overflowing Affiliate Products
- Needs Complex Marketing Strategies
- Multiple Audience Categories
- Affiliate Market Saturation
While the affiliate marketing industry’s spending will reach over $15 billion in 2024, according to the Influencer Marketing Hub, potential affiliates need significant experience, skills, and knowledge to succeed. This means that you must know what the affiliate marketing business is and how it works.
Affiliate marketing is a business model that uses online marketers called “affiliates” to promote a specific brand’s products and services. These affiliates, also called “affiliate marketers”, advertise links that lead to the business’s website or product purchase page. Affiliate marketers earn a set commission percentage for every successful referral or sale. In fact, they earn around 5% to 25% of affiliate commissions, as per William Palmer’s article on AffiliateWP.
This online business model offers scalable income and time freedom. However, affiliate marketers fail because they lack foundational and comprehensive knowledge of affiliate marketing niches, target audiences, competition analysis, marketing strategies, and industry movements. To be a successful affiliate, you must explore the reasons affiliate marketing does not work, the industry’s success rate, and the ways to make this business model work for you.
10 Reasons Why Affiliate Marketing Does Not Work
1. Low-Performing Niches
Low-performing niches like musical instruments, hunting, and wrestling have products that are difficult to sell. Thus, affiliate marketers must choose profitable niches with high demand. According to Affise, the top three most profitable niches are health & wellness, beauty & cosmetics, and finance. These niches reached $20.8 trillion in global market value in 2020.
Affiliate marketing niches always fluctuate. Some niches may not be popular now but will boom in the future. For example, the toy industry grew by 109% from 2020 to 2021. Another strategy some affiliates use is high-ticket affiliate marketing. Luxury items are high-ticket products because they have high value and demand, which offers higher affiliate commissions.
2. Overflowing Affiliate Products
Some affiliate marketers pick the right niche but sell the wrong products because of the availability of thousands of them. That’s why knowing what strategy to implement is crucial. A clever affiliate chooses high-ticket affiliate marketing (high-value and high-demand products or low-value but high-demand products). Supplements, software, and subscriptions are among the saleable affiliate products in 2024. Alternatively, guns and musical instruments are low-selling nowadays. Promoting products with low demand can significantly reduce your potential affiliate sales.
3. Needs Complex Marketing Strategies
Affiliate marketers who use traditional and outdated techniques have less chance of succeeding in the industry. Creative, engaging, and data-backed marketing strategies are key to increasing affiliate sales. According to James Creech, Senior Vice President for Strategy at Brandwatch, using data and analytics is now a critical factor in driving customer engagement and growing your affiliate marketing business.
By using tools like Google Trends and Google Analytics, you can develop a personalized marketing strategy to capture your target audience and create a lasting impression. This is more feasible than copying other marketers’ existing brand awareness strategies. The right data helps you implement effective digital and email marketing efforts to focus on the right audience.
4. Multiple Audience Categories
If you send affiliate marketing campaigns for a specific product to the wrong audience, you’ll surely lose a few customers. This is why consumer data is essential when launching online marketing campaigns. Send people the wrong products and they’ll tag you as spam. As Richard DiPilla and Mike Ruggles mentioned in a collaborative article on LinkedIn about online advertising, targeting the wrong audience leads to wasted marketing efforts and low conversion rates.
Thus, affiliates should categorize their target audience and customize the marketing communication they send according to their consumers’ interests. This will increase customer loyalty and engagement, even in a saturated market.
5. Affiliate Market Saturation
The affiliate market is saturated and has lots of competitors. Influencer Marketing Hub’s 2024 Benchmark Report states that affiliate marketing companies acquired 15.38% more funding in 2024 than in 2022. This translates to over $1.5 billion of additional funding. Thus, service offerings related to affiliate marketing experienced a 26% global growth in 2021 alone. These facts prove how saturated the affiliate market is in 2024.
While Google Trends shows a 264% surge in online searches for affiliate marketing between 2020 to 2022, penetrating this industry is still possible. You just have to create competent marketing and monitoring systems in place.
6. Needs Strategic Monitoring
Tracking customer buying behavior, affiliate revenue, online conversions, and product profitability is taxing and cumbersome. However, it is pivotal to selling the most relevant products to the right market at the right time. It also allows you to adapt to the latest trends to continue generating passive monthly income and expand your affiliate offers.
Margo Ovsiienko, a writer from Mention, a social listening web platform based in Paris, France, stated in an article that monitoring average order value (AOV), return on investment (ROI), and sales volume is necessary to adjust your affiliate marketing strategy to a specific affiliate program. While it takes significant time to analyze, these factors help affiliate marketers develop best practices that drive traffic.
7. Affiliate Partner/Program Restrictions
Affiliate partners/programs have their own set of rules to follow so online marketers know their transactional, promotional, and other limitations. The negative thing about this is that some programs have tons of rules. And this creates confusion if you joined multiple affiliate programs. On the bright side, it’s good because potential affiliates will have guidelines on the dos and don’ts of their chosen programs.
You should abide by your chosen affiliate marketing program’s terms and conditions, specifically with your marketing efforts. For example, Amazon Associates doesn’t allow affiliates with websites that have inappropriate content during the application process. By complying with such terms, you avoid program termination and legal drawbacks.
8. Fast-Paced Affiliate Marketing Industry Movements
The affiliate marketing industry is fast-paced. And because of this, some affiliate marketing businesses end prematurely. As an affiliate, you must also research market movements and industry trends to develop engagement techniques that capture customer interest. In fact, 91% of respondents from Influencer Marketing Hub’s survey consider influencers as a cost-effective form of marketing. These content creators use social media platforms, such as Instagram, Facebook, and Twitter, to advertise products using affiliate links. Once you keep up with the newest industry trends, you can build a successful affiliate marketing business.
9. Difficulty Building an Audience Base
To be a successful affiliate marketer, you need a solid audience base. Your customers/audience are the lifeblood of your affiliate marketing business. However, building an audience base is challenging. You need to create engaging content constantly to keep your potential customers interested in the products and services you’re promoting. While there are massive resources where you can get content ideas like ChatGPT, turning these insights into words or video content needs in-depth research. As an affiliate, you must understand how these ideas will affect your target audience. It should be engaging, relevant, and clear-cut.
10. Low-Quality Online Courses
Never rely on free knowledge bases that only offer basic information. An affiliate marketer who knows nothing about affiliate marketing is doomed to fail. This is the main reason you should research what niches, affiliate products, and target markets are the most profitable. According to Geri Mileva’s article on the Top Affiliate Marketing Statistics for 2023, more than 84% of online content creators venture into affiliate marketing. However, Dynu In Media, a global affiliate marketing network based in Da Nang, Vietnam, mentioned that 95% of potential affiliates fail because they lack affiliate marketing knowledge and strategies.
If you’re not willing to learn, you won’t grow and scale your affiliate marketing business. Take John Chow for example. According to Refersion, he makes about $100,000 monthly because he constantly checks industry updates like niches and products and learns from them.
Why Affiliate Marketing is Not Easy?
Affiliate marketing is not easy because of the complexities of tight competition, product and niche selection, traffic generation, and content creation. These tasks require creative and critical thinking to develop the best courses of action. According to Mediakix, an influencer marketing agency, 81% of businesses rely on affiliate programs to drive sales. However, Amanda Jerelyn from Pixel Productions Inc. states in her article that only 5% of global brands succeed in affiliate marketing. This is why most affiliates and brands ask, “Is affiliate marketing worth it in 2024?”
It is hard to be successful in affiliate marketing. Factors like market saturation, economic downturns and developments, and evolving consumer needs make it difficult to succeed. However, affiliate marketers still have a good chance of success because this online business model has low startup costs, numerous program offerings, and strong social media traction.
Why Do Affiliate Marketers Fail?
Affiliate marketers fail because of their lack of consistency, new skills, digital asset development, income diversification, link performance monitoring, and proven affiliate marketing strategy, according to Chad Bartlett and Liam James Kay. This is why only 5% of potential affiliates succeed. Some online marketers limit themselves to their current knowledge, capabilities, and level of thinking.
Finding high-quality products or services that are in demand and will sell for a long time is the biggest problem in affiliate marketing. Successful affiliate marketers explore professional, data-backed insights from reputable resources to combat this major issue.
What is the Success Rate of Affiliate Marketing?
About 1% is the success rate of affiliate marketing, according to the Influencer Marketing Hub. However, this rate doesn’t solely determine your future in the affiliate marketing industry. A 2019 survey by Forrester and Pepperjam revealed that 20% of brand marketers consider affiliate marketing their most successful digital marketing channel for customer acquisition and 33% of US Directors found it to be highly successful in driving revenue. These facts show that affiliate marketing can be profitable depending on how you make it work.
How To Make Affiliate Marketing Work for Potential Affiliates?
To make affiliate marketing work for potential affiliates, consider a profitable and in-demand niche with saleable products. It also includes picking a reputable affiliate program or partner with reasonable terms and conditions. This first step is crucial to make a solid foundation when starting an affiliate marketing business.
Moreover, affiliates utilize content marketing to advertise their affiliate link. They do this by creating blog posts with quality content on their affiliate website. This step also entails building an email list and using email marketing campaigns. By tracking affiliate links to see where your sales are coming from, you can focus on high-performing channels. And the most important thing is to learn new skills and acquire additional affiliate marketing knowledge by watching YouTube videos, reading books, listening to podcasts, or joining the best affiliate marketing courses to build a profitable business.
Is Affiliate Marketing Profitable?
Yes, affiliate marketing is profitable. Affiliate marketers earn around $12,000 to $120,000 yearly in passive income. According to Demand Sage, affiliate marketing spending will reach $13 billion in 2024. This means that more businesses will explore the idea of affiliate marketing to keep up with their competitors. And as eMarketer stated, affiliate marketing spending will grow by 10% yearly. Hence, affiliates must create high quality content to entice more potential customers, increase their affiliate commissions, and gain sizable affiliate income.
Is Affiliate Marketing Worth It?
Yes, affiliate marketing is worth it if you make more than the average income of affiliate marketers. An article by Werner Geyser in Refersion showed that while 57.55% of affiliates earn less than $10K annually, 7.94% make $100K-$150K. This means that the potential of this industry is massive. Marketers have the option of joining multiple affiliate networks and programs like CJ Affiliate and Amazon Associates. There are also done-for-you affiliate marketing business for beginners like the Easiest System Ever.
Affiliate Marketing Related Articles
Why Local Lead Generation Works Better Than Affiliate Marketing in 2024
Digitalization has pushed online businesses one step further in the 21st century. This motivated small businesses and big brands to venture into affiliate marketing to increase sales and improve their online presence. In fact, 80% of businesses use affiliate marketing to drive about 20% of revenue annually, according to Rakuten Advertising. This means that the affiliate marketing industry is growing each year.
An article by Authority Hacker states that 80% of affiliate marketers make $80,000 yearly on average while 15% earn between $80K-$1M and 1% earn over $1 million. This shows how profitable the affiliate marketing business model is. However, this industry is oversaturated and the availability of millions of products can confuse potential affiliates. The 10 reasons and multiple facts mentioned in this article prove that succeeding in affiliate marketing requires in-depth knowledge, exceptional marketing skills, and tremendous effort and time.
Alternatively, considering other online business models like local lead generation is a good option. Local lead gen isn’t as saturated as affiliate marketing. You can choose specific local service niches and cities that have high demand and create websites for each of them. It only needs minimal maintenance because when your microsites start ranking on search engines like Google, they stay ranked and leads start flowing. You can make over $50,000 monthly by selling these leads to local business owners.
Affiliate marketing is a performance-based marketing strategy where you earn a commission by promoting other people's products or services. It is a popular way to make money online, but it can be challenging to get started and make it successful. I really appreciate the insights you provided in your blog. Thank you for sharing this valuable information.