Marketing Experiments examines how some marketers turn to affiliate programs to replace lost revenues from failing PPC campaigns.

Many online marketers are finding that running their PPC campaigns has become a labor of diminishing returns.

Regardless of the number of campaigns they create and keywords they add, their cost per action is rising and profitability is falling.

Perhaps this is inevitable in a marketplace open to everyone, where both professionals and weekend warriors compete by pushing the price of keywords higher and higher.

With revenues falling, a few marketers are now looking more closely at affiliate programs as another and complementary source of revenue.

A strong program with talented affiliates will also pick up some of the cost of running PPC campaigns. That is to say, many affiliates will be running their own PPC campaigns to attract the same traffic you have been fighting for yourself. They will then refer the most qualified of those visitors to your site, in the hope of achieving a sale and earning a commission.

In addition, a good affiliate program can turn out to be a lot more profitable than PPC.

Working with one of our research partners, and investing a great deal of effort in both their PPC and affiliate programs, here you can see the comparative profitability of each over a nine month period:

Over a period of nine months, our research partner saw a dramatic reversal between the profitability of their PPC and affiliate programs.

This case study tracks the experience of just one company and should not be seen as typical. However, if we learned one thing from being involved in this process, it is that affiliate programs succeed best when you allocate sufficient resources and invest time in identifying and forging key relationships with top-performing affiliate marketers in your industry sector.

You'll find a full archive of our test results, and analysis within the MarketingExperiments.com Research Archives. The Marketing Experiments Journal publishes primary test results from work with our research partners once every two weeks. Subscription to the Journal is free and gives you full access to both our archives and teleconference calls. Subscribe here.