Everything is cyclical (in Russian), as usual. For several months now I have been watching a big new cycle begin in affiliate marketing.
1. A long, long time ago
Many, many years ago, when I was just starting (in Russian), traffic arbitrage combined several things:
- the solo model worked
- the ability to invent an approach mattered as much as the ability to scale
- information asymmetry was high: there was little information, it came from your own experience, and its value was high
- fundamental knowledge (in Russian) mattered
- there were few tools; access to them or tools of your own were a competitive advantage
- constant experiments
- low transparency—you could spy, but it took ingenuity
- switching between verticals, sources, and approaches was frequent and fast
- basic things were not basic: even monthly net7 was not always available
- sources did not really understand what was going on
- many verticals; a moderate share of GH/BH
2. Between then and now
From the beginning, everything predictably and slowly moved toward a different configuration that became the main, stable one:
- scaling mattered more than approaches: stealing an approach, improving it a little, then managing a crowd of launchers and supplying them with consumables and working capital became a reliable foundation for growth
- creating approaches remained hard and rare, while high transparency—spy tools—reduced the weight of creativity and the ability to find a strong approach; we got one and a half approaches per vertical plus their mutations, and the money went to those who could scale
- there was plenty of information: forums and blogs (in Russian) peaked, along with unique content and competent AMs (in Russian)
- competitive advantages were not in the approaches: make your own advert here, pour in comments there, sell some shave (in Russian), reduce traffic loss, get unique terms, and so on
- strong inertia—switching verticals and sources was hard, slow, and rare
- sources understood what was going on
- the value of fundamental knowledge fell: there were themes and routine scaling methods, off you go
- margins fell; the main competitors were not other super-profitable affiliates but white products with ROAS any arbitran would envy, though their cycle is longer
Almost everything moved into GH/BH. Advert, the sources do not like you? Off to an affiliate network! This is the way.
I cannot say I liked that period.
3. Now and next
What came back:
- Information asymmetry: the cause is the opposite, but the effect is the same. There is so much information that figuring out what is real and what is bullshit is not easy. AI does not save you: it does not know everything, and its soy ethics will not let it give up everything it does know. You can work around that, but not easily—you need to know the questions.
- Fundamental knowledge matters again, praise the heavens. You still need to understand which information makes sense and which does not.
- Team structures are moving back toward smart, compact, fast teams.
- Creativity and uniqueness have regained their weight.
What is new:
- Important: the pace is higher—approaches live shorter lives. Finding an approach from time to time is not enough. It is critical to keep a tight stream of new approaches flowing all the time.
- AI is a super-multiplier. If you are brave, quick, skillful (and quick on the uptake), you will do ten times more than your mediocre competitor. Simply because you can now use more tools and have bolted a bundle of robo-hands onto yourself:
- make your own offers
- vibe-
codeengineer unique tools for every taste - build a CLI for a familiar tool and speed yourself up
- assemble funnels in hours that used to take days or even weeks
- obtain domain knowledge to customize approaches for audiences
- and more, and more
- Sources and regulators understand everything and catch it better. Unique approaches—before the source catches on—or WH and pseudo-WH offers matter more.
- Transparency is an illusion. You will not recognize something worthwhile in a spy tool even if you stare straight at it, because there is too much variety.
What remains:
- Commoditization means less energy spent on consumables.
- Wins here (in Russian) and there decide the outcome.
- Market maturity lowers transaction costs.
- Working alone is hard.
The new cycle takes a lot from the beginning: a new version of traffic arbitrage with an old-school vibe and new capabilities.
Do not miss the moment. Build an approach conveyor.