Gambler or Casino ... which are you? (11)
Affiliate marketing is analogous to gambling ...
Affiliate aka player
Merchant aka casino
Where is your time better spent? Think about this:
You research an offer and marketing ...
I research a marketing to make an offer to ...
You launch campaign ...
I launch my product/service (aka funnel)
You spend several hours testing/tweaking your campaign ...
I spend several hours testing/tweaking my funnel ...
What ROI are you getting on your time?
How many campaigns have you launched that didn't make it, or were running well just to have the traffic source dry up or the offer pulled in a few days or weeks? In the end you are left with (hopefully) some cash.
When you own a funnel, every test/tweak you make to improve your (marketing) funnel pays that point forward ... it's not unusual for a good funnel to last months if not years (Parter With Paul 5+ yrs). You get to a certain point where the LCV (lifetime customer value) is high enough where you can go into any network, offer a higher payout than the competition and take all the traffic. In the end, you have an asset (customer list, viable business to sell/leverage) and hopefully a huge pile of cash.
Go to Vegas, stop in a casino and look around ... come back a week later and look around ... you'll never see the same faces, but the casino is still there 
Sure, you can think like that. But you can also think of it as a learning experience / way to build a bankroll / understand how things work before you open a casino yourself. If you don't know what players want and how they think, your casino is not going to be very successful.
Originally Posted by richc
When your offer / angle dries up or you are overbid by another offer (so much for "building an asset"), affiliates will jump on to the next wagon, while you spend months designing a new offer or product that may or may not work.
You do have a point. But remember both sides have pros and cons...It's a lot easier and quicker to launch a campaign than to launch a product, especially a good product with low return rates and a great video sales page and great conversion and high gravity.
bad analogy
I do want to move up the food chain someday, but I'm glad I started as an affiliate. Most people who try to start businesses, and all my friends with pie-in-the-sky business pipe dreams, fail because they undervalue marketing. How many people really understand, for instance, that you usually lose money on the first sale? Affiliate marketing has taught me that the marketing has to come at step 1 and it's shown me practical ways to market business, so when I do start a business I won't be in the 90% that fail.
Gambler or casino? I agree with Polarbacon that the analogy doesn't make sense. A gambler at a casino has the odds against them and can't win in the long run no matter what (aside from cheating). The casino is built to exploit the gamblers weaknesses.
Affiliate marketing is a skill like any other profession. Talented/knowledgeable affiliates consistently make big profits. Affiliates and merchants can both do well at the same time. It's not a zero sum game like a casino.
I agree that gambling is not a good analogy. I also saw this analogy somewhere else recently along with "sell the shovels, don't dig for gold". Like all cliche's I think its a shortcut to what the reality is.
Here's my .02... affiliates have it pretty good. For the most part they get paid out weekly. They can buy traffic on Credit. And except for guys who push it too hard with Diet 90% aren't on the hook for things that go wrong.
Merchants have it rough. Short code business has terrible payment terms, rebills sometimes you don't make your money back till month two, and sometimes you flat out get burned. You're usually the first line of attack for user complaints and government actions.
Both have pro's and con's and like the 'ol cliche goes "grass is always greener" lol
Rich, go start a casino and let me know how it goes
I think what rich was saying is that as an affiliate, you don't get to own "assets" and have certain leverages. I do agree that both sides have pros and cons but the future seems to point to a hybrid of an advertiser/affiliate. Now I think that is some years away but generally, you got to know the pros and cons before you decide which you decide to be. This forum has taught us how to mitigate risk and evaluating which path to take, I think that is the biggest takeaway I have from this forum.
I've enjoyed working both sides of the operation and feel a much better appreciation for what' really goes
into making a campaign or offer successful. Addressing the issue of affiliates not owning the assets..
For awhile I've been toying with the idea of tooling the offer in a manner that does away with CPA/CPL/CPXXX
altogether and instead compensates the affiliate with ownership of the lifetime value of the account.. I would
call this more 'associate marketing' as opposed to 'affiliate marketing' Imagine your $25 payday loan leads now
becoming $300.. I see this appealing more to affiliates who are funded and can wait 30/60 days out to start taking
dividends but paying out much higher over the lifetime of the customer.. Making the affiliate/advertiser relationship
more symbiotic will be powerful.
Agreed, bad analogy.
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