Affiliate Marketing – What Are the Limitations of Affiliate Marketing?
While many companies use affiliate marketing to attract new clients, there are also some potential limitations. While affiliate programs can increase profits, they can also make it difficult for brands to retain a high margin of profit. The first of these limitations is that the merchant must monitor the space in which their ads will appear, since some spaces might not be suitable for the brand. Secondly, the affiliate traffic may affect the impressions of the advertiser’s ads.
Affiliates can choose between cost per action (CPA) and cost per lead (CPA). In the former model, the affiliate will receive a commission only after a customer makes a purchase. The disadvantage of the latter is that the affiliate isn’t in control of the offline conversion process. In the latter case, the merchant is in charge of closing the sale. However, if an affiliate closes a sale, the commission will be higher.
The second limitation is time. Affiliate marketing can be lucrative for many people. However, it requires time, and the best way to get started is by learning as much as possible about the subject. It takes time to gather data from as many as 200 affiliate programs. To make a meaningful comparison, one would need to collect data from at least 20 random affiliate programs in ten different industries. Moreover, the study would need at least seven days to get accurate results.