As more and more Americans lose their jobs, many will turn to the web to try and generate income. Using the web as a revenue stream to many of us may seem like a mature marketplace, and maybe in some ways it is, but the fact remains that the web as a whole is still pretty new. We just don’t have that much trend data mapping online commerce to financial cycles. So with this post, I’m shooting from the hip. I’m going to use mostly logic, guestimates, and assumptions. Hopefully my logic is challenged and my point of view is broadened. So please participate if you can open me up a little. :-)
Unemployment rates in America are steadily increasing. Over 6.5% of America is unemployed. Logic dictates that as people lose their jobs, job marketplace websites should see increased interest. But what I am seeing, is a decline in interest for job marketplace websites. Seasonality aside (the Holiday season is a down market for most sectors outside of retail) the decline in traffic seen for Career Builder and Monster.com looks pretty dramatic.
Part of this could be because ad budgets are slowing down. Many of those sites were fueled by advertising revenue from financial products like credit cards, mortgages, insurance, and student loans. And we all know what happened to American finance. Finance tanked. (I know this first hand, because I specialized in marketing financial products for the past 6 years… and the once stable company I worked for is now all-but-out-of-business.) But even if the advertising engines for the job marketplace sites are slowing, both Monster and CareerBuilder have reached critical mass. Most people already know where to go when searching for jobs online. And people are not searching for jobs as much.
So what are Americans doing to feed their families? Searches on affiliate marketing are getting hotter. The amount of people looking to make money online has skyrocketed in the last quarter of this year. A friend from CJ says their publisher side is booming and the advertiser side is slowing to a crawl.
Money being spent by advertisers online is decreasing. Online advertising is following the expected path, and is currently off cycle. But the amount of people looking to get a piece of that pie is increasing fast. So the moral of the story is, there is less money being spent by advertisers during the recession, and we’re looking at a potential flood of new affiliates who will further dilute the potential profitability for this type of marketing.
So hold on folks. 2009 might be even harder at the bread line as the “new recruits” of recently unemployed affiliate marketers flood the web.
For those more opportunistics types, it might be a good time to launch another affiliate marketplace if you have the money to squat on it for a while. There will certainly be a lot of CJ rejects looking for a channel. Growing your publisher base will probably be easier than normal during this time. But don’t expect the advertisers to bite right away. If you have the patience to wait through this down cycle in our economy, having a big publisher base ready for the next financial cycle will be key.