The affiliate marketing industry has exploded since the Amazon first started it its Associates program. Some experts estimate that the affiliate marketing industry will be valued at $6.8 billion by 2020. This represents a fantastic opportunity for affiliates to scale business. However, it is also leading to more intense competition than ever before, which is increasing advertising costs dramatically.
Smart affiliates recognize that they need to use big data to maintain a competitive edge. WhatRunsWhere actually wrote an insightful article on the impact of big data in the affiliate marketing industry.
Why big data is essential to the future of affiliate marketing
Although the affiliate marketing industry is creating new opportunities for affiliates as it grows, new challenges are also being presented. Many popular niches that used to be very profitable have become too saturated. This means that affiliates need to consider new opportunities or refine their strategies to remain successful. There are a number of reasons that big data can help. Here are some of the key benefits.
Identifying hidden gold mines of cheap, high converting traffic
Some affiliate marketing niches have become so competitive that they are virtually impossible to compete in by using standard approaches. Performing lead generation for auto insurance companies is an example. One affiliate marketer that I spoke with promoted a car insurance offer with PPV traffic and wouldn’t have been successful without using big data tools. Most affiliates were bidding on the root domains of major insurance carriers. The cost per impression of these targets was at least $0.30, even though they didn’t convert very well.
This affiliate used a data mining strategy to find other targets to use instead. He was able to find a landing page from a similar lead generation site that relied on native advertising. He tested this traffic and found that it had a 500% ROI. This aligns with claims from Single Grain that big data is changing the future of PPV marketing. Ignition One is a PPV network that they said benefits from big data.
“Advertisers can target customers by device, geography and observed behavioral patterns, while the network’s big data solutions allow you to identify the ideal time to serve ads to customers in order to maximize your conversion rates.”
He pointed out that big data is essential for finding high converting targets that other people are not bidding on, especially with very competitive niches. Without Hadoop data mining tools, it would be very difficult to promote weight loss, car insurance, personal loan and other very competitive offers.
Finding resources to scale their campaigns
The majority of affiliate marketing campaigns are going to fail. Affiliates make up for these losses by scaling those that are profitable as much as they possibly can. Big data helps them optimize their strategies and take them to the next level. There are a number of ways that they can do this. Affiliates that use social media marketing can find the best places to buy Instagram followers or buy Instagram likes. Affiliates that use paid search ads can use big data to track the performance of their campaigns and identify the variables that have the highest impact on performance.
Discovering opportunities in untapped regions
Most affiliate marketers obviously focus on promoting offers to people in the United States. However, there are a lot of opportunities to reach people in other regions. The affiliate marketing industry is exploding in Asia. According to some estimates, the ecommerce market will be worth $1 trillion in Asia in the near future. Affiliates can take advantage of low-cost traffic and us it as a tool to reach a huge base of customers.
However, there are also going to be unique challenges for affiliates trying to reach emerging markets. Although they will have access to cheaper and often higher converting traffic, they are going to need to know how to get access to the traffic they need to be profitable. People that don’t live in those regions are going to have a more difficult time figuring this out, especially since the search terms people use in Google are different and they visit different websites.
The good news is that there are a lot of tools that use big data to help them find how to get access to this traffic. A number of keyword research tools help them create massive lists of PPC search queries that they can target with their paid search ads. There are also a lot of scraping tools that use big data, which help them find websites to use for PPV ads or media buying campaigns.
Big Data is Changing the Reality of Affiliate Marketing
The affiliate marketing industry is changing at an unprecedented pace, largely due to advances in big data. Big data is giving affiliates access to better insights and helping them explore new opportunities.