I earn my living from both display ads (i.e. AdSense) and affiliate marketing.
Currently, I earn quite a bit more with display ads, but in the past I earned more with affiliate marketing. You can see a recent breakdown in my income reports. Please keep in mind my income reports do not include fatstacksblog.com income, which does earn affiliate commissions and course revenue so my income reports a bit skewed in favor of display ads.
Which is better – AdSense (display) ads or affiliate marketing?
You know what I’m going to say.
My answer: if forced to choose, display ads. I probably fall in the minority of folks on this, but I’m going to defend my position.
The point of this article is to set out pros and cons of each. On the balance, IMO, display ads are better.
Each is not without risks.
In fact, until late last year, I didn’t realize there were significant risks with affiliate marketing until I suffered a big blow. Then a couple of months ago I suffered a second big affiliate marketing blow. I explain these below.
That’s not to say I haven’t been kicked in the teeth relying on display ads. I have.
It’s interesting how the disasters resonate in our minds more clearly and for longer than successes. I guess pain is a stronger emotion than pleasure.
Below I set out pros and cons of each. You decide what’s right for you.
Over the last year, I had a recurring commission merchant cut my commission from 35% to 20%. That was a huge recurring commission haircut (about $4,000 per month).
Then another merchant went bankrupt. I was earning $2,000 per month passively promoting them. The company was bought and I’m told the buyer will set up its own affiliate program, but until then, I’m out $2K per month. I published a lot of content promoting this product. While there are substitutes, the commission isn’t nearly as high (I guess perhaps that’s one reason they went bankrupt to begin with).
Great for email
Being able to personally recommend products with affiliate products in an email is very powerful. Fortunes are earned with this form of affiliate marketing. While Amazon doesn’t permit it, most merchants do.
Higher RPM for buyer intent keywords
When you rank for a buyer intent keyword, you can achieve fabulous RPM numbers… $75 RPM+. This is very unlikely with display ads.
Recurring revenue possibility
Sell once, earn for months or years. That’s the power of recurring commissions. You don’t earn recurring revenue from display ads, but you can with certain products.
Use on social media channels
You can promote products with affiliate links on Facebook, Twitter and Pinterest. While I don’t do this much, you can and you may just make it pay. It’s nice to have additional promotion opportunities.
You have no control over commission rates. In 2017 Amazon chopped its commissions and then again in April 2020. Merchants cut commissions all the time. You set up a huge promotional campaign earning $X amount and then out of nowhere your revenue decreases. It’s not fun.
Harder to attract links
How often to you link to Billy’s awesome lawn mower review articles? Yeah, exactly. You don’t. I never link to other bloggers’ reviews unless it’s mind-blowingly interesting which is rarely the case.
However, I do link out to many, many sites from my niche sites to informative and/or funny content all the time. These articles I link to don’t have affiliate links. In fact, most articles I publish link out to other sites for additional resources for readers and/or sourcing info.
If you want links to your affiliate content, which you do and need in order to rank, you need to build them. It amps up the risk, is a horrendously boring task and/or expensive.
Far fewer keywords
You’re not going to sell products consistently with an article such as “7 Reasons Hollywood Rejected X Actor”. Only buyer intent content will successfully promote products with affiliate links. This means you have less content options and much of it is more competitive.
If you write content yourself, it gets pretty boring writing product-oriented content day-in and day-out. I’d much rather research and write an article such as “AdSense vs. Affiliate Marketing” which to me is fun to think about and write even though there’s no real affiliate marketing opportunity.
Some affiliate sites that only do affiliate marketing end up publishing only content that promotes with affiliate links. What CAN end up happening is a site that’s kind of spammy looking given everything is a promotion. Some add additional informational content but put little effort into it. What you end up with is a subpar site content-wise. I’d rather publish a stellar content site with some affiliate promotion but with most content earning with ads resulting in a very good site.
Merchants file bankruptcy leaving you with ziltch
This happened to me. It’s an unlikely scenario, but it happens. I’m owed $16,000. I have no idea if I’ll get it.
Affiliate programs terminated
Out of nowhere affiliate merchants can end affiliate programs rendering your affiliate links across content worthless.
If you operate in a seasonal niche, there may be months you earn very little because your audience doesn’t buy the stuff during those months.
AdSense (Display Ads)
Publish on any topic (as long not in violation of TOS – still leaves a lot of options)
This is my favorite, number 1 reason for using display ads. I love being able to publish interesting, fun, helpful content even if there’s no opportunity to promote products. This also opens up a massive vault of long-tail, low competition keywords that with ads can earn money in the long run. Even if each piece of content only earns a tiny bit each month, together all the content can earn very good revenue.
Can earn way better than you think
When my biggest niche site hit 500 visitors per day it was still an affiliate site at that point but earned peanuts. Just for kicks I slapped up a few AdSense ads on the site. Within hours I had earned more from ads than what it had earned from commissions the preceding 30 days. That was an illuminating moment for me. Since then I’ve been an ad guy ever since and haven’t looked back.
No concern over conversions
With ads I don’t have to worry about sales conversions. But, I do worry about and test ad placements which is the same thing. I’ve spent an inordinate amount of time testing ad placements and it makes a huge difference. But, once you have a good formulation, it’s set it and forget it. Just crank out killer content daily.
Nothing is easier than finding a competition-free keyword with some search volume and then getting search traffic to it. Once traffic arrives, it earns on auto-pilot with ads. On its own it won’t earn a fortune, but it trickles in the pennies… with enough pennies trickling in you can build up a sizeable revenue.
Get paid like clockwork
If you use AdSense, unless you get banned, you can count on getting paid like clockwork. Unfortunately, publishers do get banned, which is a risk, but at least you don’t have to chase Google for money. Most ad networks pay on time. Only once did I suffer a payment delay. Otherwise, all ad networks I’ve used paid me on time.
Less vulnerability to seasonality
While ad revenue does fluctuate throughout the year, and worse in some niches than others, the volatility is less than seasonal affiliate offers.
FYI, AdSense is great, but Ezoic ads earn more. I use Ezoic on most of my niche sites instead of AdSense.
You’re not going to earn $50 RPM with an article about the cast of Growing Pains TV show. But you can earn $50 RPM with a sneaker article. You need more traffic with display ads to make a good living.
Risk losing an ad network account
This is particularly true with AdSense. AdSense bans publishers and keeps the accrued revenue. A ban renders your site worthless and of course kills a great revenue stream. It’s a real risk you need to be aware of. To avoid a ban, pay attention to AdSense TOS.
Can’t use in email newsletters
You cannot put AdSense ads in an email newsletter (unfortunately). However, there are ad networks that do permit ads in emails… they just don’t pay as well as AdSense.
Can’t use on social media
I was thinking today how awesome it would be if Pinterest gave us the option to embed our AdSense code into our pins. Imagine being able to put our own ads in pins. Given I get 9.3 million monthly impressions on Pinterest, that would be some serious revenue.
Sadly, neither Pinterest nor AdSense permits this, while Pinterest and merchants do permit affiliate links..
Compromises website attractiveness
Ads don’t look good on sites. That’s the price visitor pay. They’re intrusive and ugly. Affiliate links, on the other hand, don’t look so bad; they’re just links.
What about using both?
If forced to choose one or the other, I’d go with display ads.
However, the reality is I use both display ads and affiliate promotions to monetize my site. That said, the lion’s share of my revenue is from display ads because I like publishing informational content far more than buyer intent content.
That said, there are niches where lead gen opportunities are so lucrative and are so effective on all kinds of content that ads would do the site a disservice. I get that. If you’re in such a niche, focus on your affiliate promotions. However, if you’re building out a site dedicated to Amazon promotion, there is so much opportunity to expand topically for more traffic and more revenue for ads that it’s worth trying. You never know – you just might end up making more money from ads than affiliate commissions.
Jon Dykstra is a six figure niche site creator with 10+ years of experience. His willingness to openly share his wins and losses in the email newsletter he publishes has made him a go-to source of guidance and motivation for many. His popular “Niche site profits” course has helped thousands follow his footsteps in creating simple niche sites that earn big.