Why Referral & Affiliate Programs Beat Plain Old Contextual Ads
Posted by Joel Falconer in New MediaJun 22nd, 2008 | 10 responses
This site has a few ads on it of different types, and they bring in some cash. And with a headline like that, you’d be expecting an article about whether referrals and affiliates make more money than contextual advertising. Wrong. This article is about which one helps you bring your readers more value.
You’ve heard of gatekeeping theory, no? It describes the way in which information is filtered before distribution in human communication and, more specifically, the media. Gatekeepers are those who make decisions as to what information reaches a public (a public is a public relations term for a specific audience of people).
Usually anarchists use gatekeeping theory to demonstrate how the media supposedly controls people. I say if people are controlled by anyone but themselves, it’s because they let themselves be. Anyway, the function of a gatekeeper is not inherently evil. It’s all about how it’s used. Sure, the gatekeepers in most of the world’s media are not looking out for your best interests. These guys are not great role models.
But referral and affiliate programs give content producers incentive to act as gatekeepers for their publics, by filtering through and pointing out products that they find worthwhile and useful (or at least highly entertaining). These monetization methods allow you to provide value to your readership, while still enabling you to make some money and put food on the table.
And, like any tool, referral and affiliate programs can be used and abused in less-than-noble ways. But we’re not going to do that, right?
So, to content producers I say: use these tools to benefit yourself while servicing your audience. There is no point in producing content if servicing your audience is not your highest goal, and you’ll find you have a hell of a time getting any recognition or credibility in the new media market if you have entirely selfish and morally ambiguous motives. It can be done, but you’ll find it works much quicker when you provide value.
And to the producers of products of all kinds I say: make the tools available for those who respect and gain value from your creations, so they can act as gatekeepers and bring these things to the right audience.
Seriously, what better business model is there than to bring insanely good value to all your publics?
10 Responses to “Why Referral & Affiliate Programs Beat Plain Old Contextual Ads”
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Joel,
I agree with the general principle here: If you ahve ads on your site, they should address you rparticular reader’s needs — and that’s one of the ways you add value to the site.
However, I don’t agree that referral/affiliate ads are necessarily better at that than contextual ads. I’ve been bouncing back and forth between different ad providers at The Writer’s Technology Companion since I launched it. What I find is that the niche (writing) is fairly small and a lot of the affiliate programs available are somewhat scammy — overpriced software and instructional programs that promise to help writers “get rich fast”. There are some exceptions, of course — I read _Writer’s Digest_ and recommend the magazine, so I was glad to find they had an affiliate program.
Mostly, thugh, the limit is in numbers — there simply aren’t a lot of affilaite advertisers in the writing niche. Google AdSense, on the other hand, seems to do a pretty good job of finding advertisers that are relevant to the site’s content and, I assume, to the people who read that content. Now, I can’t personally vet every advertiser that comes through AdSense; on the other hand, I hope that Google is aggregating complaints about advertisers at a scale that I couldn’t begin to approximate.
I would recommend testing both affiliate and contextual ads and seeing which offers the most relevance to your readers. Click-through rates are a pretty good index of this, since people only click on ads (well, not only, but typically) that offer them some value. Some contextual ads will be worthless — one network served ads for Station Casinos almost exclusively, I assume because I’m based in Las Vegas. NOT USEFUL! But a lot of affiliate programs will also be worthless of ryour readers, and finding the gems might be more work than the value gain it can produce.
Dustin, I do agree with you on many of the points you raise. I certainly do think it’s important to monetize using contextual ads and referral/affiliate programs, hence my own mixed use. Having multiple income sources on a monetized site is incredibly important.
But looking at much of what is advertised using AdSense seems to reveal an endless stream of very low-quality material. Sure, they’re relevant to the site’s content. The contextual engine is great at finding matching ads. But whether or not the product that matched advert promotes is worth purchasing is harder to tell.
For me, I’m more likely to click through and make a purchase if a writer has demonstrated the value of a product and put his or her objective backing behind it, rather than clicking an ad in a sidebar. I haven’t clicked more than two or three contextual ads in eight or so years; but I have bought products from referral links.
And most of the time, those purchases were worth it - that’s why I think the content producer as a gatekeeper is so important.
Joel: That’s precisely one of the reasons I’m debating whether to put adsense on my blog. I know that the books that I recommend are great, and I know that the affiliate products I recommend are great. However, I don’t know what adsense ads I would get and where those ads would lead my readers.
“But looking at much of what is advertised using AdSense seems to reveal an endless stream of very low-quality material.”
YES. This is a HUGE issue with Adsense. I am going to use this weekend to look at AdBrite and see if it might be a better fit for me.
Joel -
Excellent post. I’m focusing on creating valuable content. That’s my paramount focus for now. Later on, I wanted to add affiliate ads to make money but only if that brings value for my readers as well. Thank you for your view points. It’ll be easier for me to decide when time comes to add affiliate ads on my blog. Shilpan
Hi Joel - I remember reading about 6 weeks ago on proBlogger that if you’re going to monetise at some point, it is better to do it from the start, so it won’t upset visitors when ads suddenly go on later (I’ve since seen other views on proBlogger).
So I’ve put some adsense on my still young blog, but they are pretty bad for my topic - I’ll see how I feel about it. Thanks for the discussion!
@Shilpan: Glad you got some value from the article. It’s always clearly evident at SuccessSoul.com that your focus is on creating valuable content. Keep up the fantastic work.
@Robin: The ads on your blog are placed tastefully and don’t obscure the content. The content seems to be pretty relevant on your AdSense skyscraper - you might try putting a banner between your article content and your comment section as I’ve done, because it increases click-throughs without looking tacky or getting in the way.
Ha Ha Joel - after thinking about your discussion, I took my ads off! Maybe I’ll put them back on now!
Then I signed up for AdBrite after reading Vered’s comment - but I’ve taken them off again because they don’t have a personal development or self improvement type of category.
I’m not fussed about click-through - I only want a few ads to accustom my HUGE audience to seeing them.
Cheers - Robin
Hey Joel, I decided to give adsense a try to see how it goes. I put a banner between the end of my post and the comments section. Come see how it looks.
@Robin: Hehe, your readers are going to get confused - are there ads or aren’t there?
AdBrite is not the best for personal development sites, and there are different networks that suit different types of sites - I’d say AdSense is the best for personal development that I know of.
@Marelisa: Looking great, not obtrusive at all. Hope it gets some click-throughs!