Impact Of Coronavirus (COVID-19) On The Affiliate Marketing Industry

Affiliate marketing businesses have been dealt rough blows from the impact of COVID-19 on their ... [+] industry, resulting in suspended affiliate programs, declining ad revenue, but also some unexpected developments as well.

No business, industry or economy has been spared from the devastating effects of coronavirus and its infectious disease, COVID-19. Some industries have naturally taken the impact much harder than others, such as airlines, restaurants, live event companies, movie theaters and many more. But these are hardly the only ones suffering. Each industry is experiencing its own unique set of challenges that are threatening to undermine once-thriving businesses.
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One industry that is taking on enormous pressure from COVID-19 is the affiliate marketing industry. With Americans self-quarantining in their homes, hunkering down and watching their spending, affiliate marketers are dealing with unprecedented disruptions to their business as affiliate programs are cut and commission rates get slashed. Indeed, many marketers think the effects of the coronavirus pandemic will be worse for their industry than the 2008 financial crash.

We asked several affiliate marketing business owners, CEOs, managers, strategists, partners and many other experts to identify the significant ways COVID-19 has had an impact on their companies and the industry as a whole. Read on to find out what the impact of COVID-19 has been like for the affiliate marketing industry.

The Effects of Coronavirus (COVID-19) on the Affiliate Marketing Industry
The impact of COVID-19 on the affiliate marketing industry is manifold. Rather than a straight-across-the-board negative impact, COVID-19’s effects on the industry are more complex. Here’s a look at some of the most critical ways COVID-19 is impacting the affiliate marketing space.

The Impact Is Uneven
Some sectors have been severely ravaged while others have seen immense growth. This mixed impact is one of the most common themes reported by a variety of affiliate marketing leaders, business owners and strategists.

“COVID-19 has turned the affiliate marketing industry upside down,” said John Lincoln, co-founder and CEO of Ignite Visibility. Some areas that used to have offers have completely gone away while others have exploded. We are seeing health, entertainment, supplements, medical supplies and oxygen and breathing items really take off, for example. While on the other end, affiliate offers for gyms, certain types of education and more go away.”

Flexibility, therefore, is the name of the game, but it cannot solve everything. “This has caused affiliates and companies to quickly pivot to refine their offers. Savvy affiliates have tried to pivot quickly to sell more items with the rising demand. But in some cases, companies cannot fulfill on the fast-rising demand so they have put programs and payouts on hold,” said Lincoln. 

The key point here is that the effects on the industry due to COVID-19 can vary significantly from sector to sector, product to product and service to service. Indeed, companies are reporting negative trends in one facet of their business while reporting positive ones in other areas. Certain metrics are down while others, often unexpectedly, are up.

Ad Revenue Is Down
A very common pattern among affiliate marketers is a drop in advertising revenue. This is very understandable result of COVID-19’s impact on consumer behavior, but the effects on ad revenue span across a diverse array of affiliate marketing companies, from real estate to healthcare to rideshares and much more. 

“I make money on ads and affiliate partnerships, and my ad revenue is down about 20% month over month,” said Andrew Helling, a licensed-real estate agent and founder of REthority.Com, an online resource for real estate professionals and their clients. “The real estate market is slower than normal for the spring because fewer people are seeing houses, so I've seen agents cut back their advertising budgets.” And, it’s not just the traditional homebuying part of real estate that’s taken a severe hit. Ancillary real estate businesses, such as AirBnB and short-term rentals, have been wrecked badly by COVID-19.

“I'm seeing drops in rewards and loyalty affiliate performance,” said Peter Czepiga, growth marketing strategist at Bespoke Post. “Many rewards-based apps and marketplaces like Ibotta or Miles rely on the user to do some sort of activity like purchase from brick-and-mortar retailers, or walk or travel, in order to exchange those investments for rewards. With millions of Americans stuck at home, their user engagement is down, and thus affiliate revenue is down.”

A decline in ad revenue is a frequently cited challenge by affiliate marketers. However, it is only one part of the story. The impact of COVID-19 may be reducing ad revenue, but multiple affiliate marketing experts we reached out to identified interesting, and sometimes positive, trends developing.

Some Businesses’ Non-Core Products Are Thriving
Many affiliate marketing companies, ones which have multiple product verticals, are seeing products that weren’t staples in the past now performing quite well in the wake of COVID-19. Companies whose business had centered on one or two key verticals in the past are now watching their core products overtaken by what seemed before like secondary products.
Ryan Zamo is the co-founder and CEO of Z-SkinCosmetics, a company specializing in organic and handmade e-commerce beauty brands, and his business has been experiencing incredible changes due to COVID-19’s impact. “Our affiliate marketing was coasting along before the pandemic; after it happened our affiliate program had become huge. Basically, it’s because we make and sell hand sanitizer. Our signup rate has exploded and people made well over $1,000 last month on 10% commission. Those that did have been smart and started contacting business owners and wholesale purchasers to buy in bulk from us,” said Zamo. “Since we manufacture our own products, we’ve been able to keep up with demand, so affiliates are making bank because the more other companies run out of sanitizer, the more the affiliates’ customers return with even larger orders.”

“For our business — the ones I manage affiliate programs for — while traditional sports nutrition supplements like fat burners, prohormones and pre-workouts are down in sales, vitamins and immune boosting supplements are up, we’re having some of our biggest sales weeks ever,” said John Frigo, affiliate manager for My Supplement Store, among others. “Affiliates of ours who are able to pivot into promoting those items, as opposed to just pre-workouts and protein powders, potentially could be having very good months.”

Online Classes Are Showing Positive Signs
Even as one area of a company’s affiliate marketing might be in dire straits, other affiliate services are seeing positive trends. A big example of this is online learning and classes, which makes sense with so many Americans self-quarantined in their homes. “Interestingly, my affiliate partnerships with online class providers have skyrocketed these past couple weeks, up to three-times my average volume. Additionally, I've seen property investing software signups increase drastically as well,” said Helling. “I've dedicated far more of my resources to similar articles on these types of software that users are researching.”

“E-learning products are growing like crazy and it’s the perfect time to negotiate your affiliate rate if you’re delivering sales,” said Quincy Smith, founder of ESL Authority, which provides jobs, resources and courses for learning to teach abroad, “The impact on traffic and earnings has been great and we can then leverage that to try and get a few more points on what the company pays us.”

Effects on Web Traffic Are Mixed
With so many Americans constantly searching for information on or related to coronavirus and COVID-19, it’s not surprising many websites are seeing their visitor traffic getting thrown for a loop. 

“Because we help multiple clients in the affiliate space doing SEO, we have seen some interesting trends in affiliate marketing,” said Nate Nead, CEO of SEO.Co. “While most websites have seen a COVID-19 related dip in both traffic and sales, others have seen a relative increase. For example, some of our clients run affiliate marketing for home exercise equipment, which has seen a substantial uptick in the last several weeks.”

Again, the key point is that COVID-19’s effect is varied, not straightforward, and depends very much on the areas covered by affiliate marketing companies. For example, Avi Wilensky is the founder of Up Hail, a coupon and promo site for Uber, Lyft and similar rideshare companies. “Usage of our site is highly correlated with demand for these rideshare services. Since the lockdown, we've seen about a 75%-to-80% drop-off in our normal daily pageviews and users,” said Wilensky. “Ad and affiliate revenue are directly correlated with those metrics. That's the main challenge. For now, all we can do is weather the storm, there is really not much of an alternative.”

Affiliate marketers have responded as best they can to the disruption of web traffic caused by COVID-19. Taking cues from what has been working on his real estate site REthority, Helling has refocused much of his strategy and content, with solid results. “My organic traffic to my blog has increased 46% from the same time last month. I believe this is because I write about real estate trends, investing software and home improvement, and people have more time to dedicate to planning their own improvement projects. I'm doubling down on these articles and expanding my ads on homeowner-specific pages.”
Supply Chain Disruptions and Longer Shipping Times
One of the most frustrating effects of COVID-19’s spread is the disruption dealt to supply chains. Many affiliate marketing companies are still doing well, converting leads, making sales, but the havoc wrought by the coronavirus on supply chains is negating these gains. And disruption to supply chains cascade down and travel upward, hitting all businesses along the chain. 

“The supply chain problems that e-commerce businesses are facing basically wind up hitting affiliates who sell their products as well,” said Frigo. “Also, with the economy struggling and many people out of work and being more conservative with their money, people are spending less which also hurts affiliates.”

One of the more immediate results felt from disrupted supply chains is prolonged shipping times, said Smith. “Our website traffic is up as is the interest in physical affiliate products, but people are buying less due to how long it will take to get to them, as opposed to not wanting to spend money.”

Prolonged shipping times are especially troublesome for affiliates of Amazon, which accounts for vast numbers of affiliate marketing companies. “I’m sure we’ve all heard of Amazon stopping inbound shipments of non-essential goods for third- party sellers, as well as long Amazon delivery times of up to a month on non-essential goods. Amazon Associates, for example, now have a much less attractive product to sell if there’s a 30-day delivery time from Amazon but someone can run out to a brick-and-mortar store where an affiliate can’t earn a commission and pick that item up in person,” said Frigo.

Reduced Commissions and Suspended Programs
Across the board, the affiliate marketers we talked to nearly all mentioned suffering from the harmful effects of reduced affiliate commissions. “Amazon suspended programs — over 100 travel and entertainment partners have either suspended program or reduced our commissions,” said Mark Mazza, co-founder and CEO of SearchPromoCodes.

“Amazon is the world's largest affiliate network, and today they announced to cut the referral fees for most products, with multiple categories seeing a 70% referral fee drop,” said Ahmed Mir, founder of Nature and Bloom. “I own a site in one of the niches with the most severe drops, which is dropping my income for that site by over 50%.”

Worse than reduced commissions are outright suspensions of affiliate programs. This has become widespread as the impact of COVID-19 has disseminated throughout the economy, with some programs suspended indefinitely with no warning, said Shawna Newman, a business consultant, digital marketer and founder of Skipblast. “With the suspended affiliate programs and the programs with lower rates, the obvious coping strategy is to seek out alternative programs where you can recommend products and get paid. However, there's not always an alternative option. When that happens, you have to pivot to something else entirely, such as display ads.”

Finding Opportunities Amid Crisis
It’s important to remember that, whenever dramatic changes or events occur, there is also the potential for new opportunities. Downturns require individuals and businesses to rethink, retool and adapt, which often results in the long-term in greater efficiency. A point made by nearly every affiliate marketer we reached out to is the need to pivot.

Many affiliate marketers are changing up the priority given to certain campaigns in order to take advantage of current conditions. “The COVID-19 outbreak hasn't made a huge difference to my bottom line overall, but it has completely changed on a campaign-by-campaign level.” said Jamie Anderson, CEO of Jamie-Anderson.Com. “One of my most successful affiliate campaigns, that I have been running for the last five years now, relies heavily on there being live sports on TV. Obviously, this has meant that the demand for the product is at almost zero, so that campaign is pretty much dead in the water and on pause until things get back to normal.”

“On the other hand, I also have campaigns in the life insurance niche, which is delivering far better ROIs than it was prior to this pandemic. This outbreak has made everyone stop and think about not only their own mortality, but their family's too, so the life insurance and protection industry is doing a lot of business,” he said.

In the end, the challenges posed by the impact of COVID-19 are truly unprecedented. The affiliate marketing world is being placed under immense pressure by the current crisis, but the ingenuity, resolve and flexibility that many in the industry are demonstrating are precisely the qualities that can help them weather this storm successfully.
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