Going Micro: Affiliate Marketing Online Finds a Niche

Here's a question.  If you are a marketer trying to reach consumers, would you rather hit 500,000 people in one site, or use 1,000 different sites (with a readership of 500 unique people each) to reach the same number of individuals?  Making the broad assumption that a higher majority of readers of smaller publications are more likely to be loyal readers - most marketiers would probably choose the second option, given all other factors are equal.  But any answer is not as interesting to me as the fact that we can even ask that question today.  Whereas the early days of microtargeting online meant that advertisers would work with individual sites to segment and target groups of audiences ... today advertisers are no longer tied to one site publisher.  They can go micro and work with thousands. 

There are two phenomenons that have led to this dearth of choice - the rising adoption of Adsense among content publishers, and the growth of affiliate marketing programs.  There is plenty of talk about Adsense - but looking at the most recent issue of Revenue magazine and the blog reminded me again of the potential of the affiliate marketing model.  Affiliate marketing programs offer the ability for site publishers to drive their traffic to other sites (or networks of sites like Commission Junction) in return for commissions.  The interesting thing about this model is something that originally came as an insight from the online porn industry ... that there is money to be made in sending your site traffic to other sites that may be better suited to give users what they are looking for.  In part, this is the power of Amazon's long term strategy: they rely on the affiliate marketing model to drive traffic and sales for their site. Much of Google's success in growing their ad revenue from the Adwords program is also due to their close ties to their affiliates.  There is even a Myspace group dedicated to the topic.  As personal media continues to grow, more and more content creators (large or small) will continue to seek ways of getting revenue from their content.  That will offer big opportunities for interactive marketers wanting better (and often cheaper) ways of reaching niche audiences.