I see many of the same merchants advertising on my niche sites. In theory, it would seem that I could cut out the middle person (the ad network) and earn more by putting up my own banner ads promoting those merchants with affiliate links.
That’s theory. It doesn’t work. I’ve tested it (on a limited basis).
But why doesn’t it work? Why don’t affiliate banners pay more than the programmatic ads promoting merchants?
Surely advertisers aren’t losing money with their advertising? They must be profiting from paying for all those online ads, right?
They are. Don’t worry about them.
The answer lies in secondary goals merchants pursue with online ads. I’m talking about building brand recognition. In fact, perhaps for some merchants, building brand recognition is their primary goal.
You can tell by the ad whether a brand is focusing on brand recognition or gunning for the click and subsequent sale.
Some ads are boring but the brand name is clear. The entire ad is the brand. There may be a weak call to action but that’s secondary. The goal of the ad is to get eyeballs to see the brand… over and over and over.
Other ads are clearly designed for the click. Some don’t include the brand and instead list out some benefit(s) its target audience is interested in.
If all online ads focussed on the click that would mean several things such as:
- Less money spent online
- Fewer bids per ad spot (thus less money bid)
- Clever affiliate banner ads could out-earn programmatic ads.
Fortunately for publishers, merchants use online advertising to build brand recognition. My guess is that at least half of all online ad spending is geared toward that end. Probably more.
Big brands know that brand recognition pays off in the long run. They may not get the click and sale initially, but in the long run when folks need what those services offer, their brand comes to mind. It’s the long game. It’s smart. It’s great for publishers; especially publishers that publish mostly informational content (like yours truly).
There are always exceptions. If you have a post targeting a high buyer intent keyword, affiliate links could very well earn you far more than programmatic ads. I have some posts like that. Not many, but some.
Some niches are the exception as well. If you’re getting piles of traffic in the weight loss niche or other problem solving niches, affiliate banners to high converting products can pay far more than any ad network.
Take Fat Stacks as an example. I had AdThrive ads on here for a while. They earned very little relative to affiliate commissions. Now, I don’t pepper this site with affiliate banners. I opt to focus on attracting email subscribers which I then monetize with affiliate offers and course sales. However, I suspect affiliate banners would pay more on this site than programmatic ads.
Brand exposure is why ad networks pay more than AdSense
I got my display ads start with AdSense. Many of us pubs have. It was years ago. In time, I upgraded to Ezoic which earned me more money. Since then I moved to AdThrive and now I’m with Mediavine. I’m inching my way up the display ad food chain. Maybe one day I’ll have so much traffic that I’ll sell ad spots directly to fortune 500 companies.
AdSense was great but the bulk of revenue for publishers is based on ad clicks; not impressions.
Ezoic, AdThrive and Mediavine pay revenue based on impressions. This is far better for publishers because it’s far more in line with advertisers’ objectives. Ad campaigns designed to get their brands in front of eyeballs won’t garner many clicks but they still get their brand out there. That’s worth something for those brands; in some cases it’s worth a lot in the long run. That means advertisers should pay for those impressions, which they do thanks to the likes of Ezoic, AdThrive, Mediavine and other ad networks.
And that’s why using affiliate banners so often will not earn you anywhere nearly as much revenue as programmatic display ads.
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.