Eric Siu and Neil Patel argue affiliate marketing isn't dead, but pure SEO plays are fragile. Companies like NerdWallet and Bankrate survived by building real brands and shifting to partnerships. Affiliates chasing tax havens or short-term money without brand loyalty are the ones struggling.
Chapters
You have this one over here on if affiliate marketing is dead. And I think it's an interesting one because I have a story to share because I just met with someone yesterday in the affiliate space. So you go ahead.
I know a lot of companies that are still making money through affiliate marketing like Red Ventures, right? And it's a version of affiliate marketing in essence.
They're— it's a better version.
And there's a lot of companies still doing really well. There's a lot of companies like Forbes that aren't doing as well. And what we're seeing is The companies who are doing affiliate marketing and they're just purely relying on SEO traffic, they're not doing well. The companies who have built a brand, call it like the NerdWallets, they've done extremely well and they've shifted their model from straight up just affiliate marketing to a lot of direct deals. You've seen businesses like them do well. You may say, hey, well, NerdWallet stock is not crushing it, it's not going up and to the right really fast or anything like that, but generally speaking, it's a solid business that's printing cash.
Yeah. So it's interesting. I actually interviewed someone on Monday. This is for a job interview. And I was talking to this guy and he worked for— he actually used to work for Red Ventures and a handful of people that used to work at Red Ventures now works for his company that he's at now. Here's the thing. They just laid off 60% of their staff.
Whoa.
They basically copied the Red Ventures model and they laid off 60% of their staff. This guy was one of the cuts and he was a GM. He basically, you know, we talked about parasite SEO, which is where you leverage someone's domain authority like a Forbes and you make like a Forbes advisor, right? He was doing that for a couple other companies. But the problem is, they all got hit. And basically, the board was like, hey, we don't think there's much of a business here anymore. And we don't want to wait to find out. So we're going to lay off a bunch of people. So that's what happened, right? And then yesterday, we talked to our GM that's running the Agency Owners Association, Greg, and he was talking to an affiliate. I'm like, I don't know if this is going to go anywhere, man. Because typically, like affiliates are very short-sighted. And they just look at money, which is, that's fine. That's what they're optimized for. And lo and behold, The deal that he was putting together fell apart completely because this affiliate wasn't reliable. So there's 2 things, right? One, I think parasite SEO as we know it might be on a downward trend. But I think the way you're saying, if you adapt, affiliate marketing is okay. You have to adapt. We agree on that.
Yes, you got to build a brand like a NerdWallet, a Bankrate, a CNET, any of those. It may not be as big of a cash cow as it once could have been. But there's still a solid business there. And you can still make millions of dollars.
And these guys are real businesses because one of our former clients, Fundera, they were bought by NerdWallet. contact there is now the CEO of NerdWallet, right? And so they're, they're playing business, they're buying other businesses, they're looking at other— they're looking at going direct, like you mentioned, you have to zig, or it's not even zigging and zagging, it's more so you have to adapt with the times. The affiliates that I think are in trouble are the ones that don't adapt, that are still— that still continue to be short-sighted, that are so money hungry, that they won't go the extra mile. And just be reliable, because a lot of affiliates I know are pretty unreliable people. And that's just how it is, which is why like, we've played in affiliate space before, but we We didn't stay very long.
Yeah, the most common thing that Eric and I see with affiliates is they want to work really hard for a few days a week and then chill. And then once they're making the money, they want to chill, travel, have fun.
Move to Asia, right? Nothing wrong with moving to Asia, but it's like, it's a different mindset.
Or Puerto Rico. We see a lot of affiliates focusing on Puerto Rico.
They want to chill and it's cool, but you're not wired that way and I'm not wired that way.
No, but also when you look at why they moved to Puerto Rico, they are like, oh yeah, no taxes, you save money or very little taxes.
Yeah.
And instead of thinking about tax savings, they don't really think about growing the net worth and increasing the revenue of their business. They try to just optimize on the savings end instead of focusing on how to double down and create a much bigger business.
It's better to just grow. And plus at the same time, if you're saving the money but you're miserable, then it's not worth doing it.
No.
Now that being said, we have friends that live in Puerto Rico that love it there. Remember I almost moved there?
You almost moved there.
Yeah. And then I had all my stuff moving there already. It was in the process of getting moved there.
Wait, you already were? You rented a place too, right?
Yeah, yeah, yeah. You had to back out. I had signed the lease and then I backed out. And I basically gave up like 3 months of rent. I just said, just take it. Um, but I redirected all that stuff to Miami and then I've lived in Miami for 2 years.
And so why didn't you, why'd you decide to bail on Puerto Rico? I'm assuming you were trying to move there for tax purposes.
Yeah. But because I realized I didn't think what, however much money I saved, like it's not worth my happiness at the end of the day. And I think it's worth it. It's worth considering moving to Puerto Rico if you're married. I'm not married. Right. Um, and by the way, like it's not good for dating because there's a brain drain. All of, all the people that live in Puerto Rico, like a lot of them actually end up moving to the States. Uh, a lot, a lot of people actually move to Miami. So the point is like, you have to consider what we're both trying to say here is you have to consider all the trade-offs, right? And a little tax savings isn't worth it to sacrifice my happiness.
Totally agree. And I also think Puerto Rico is a terrible place if you're married with kids, cause the education system is not going to be as good as the States.
Yeah. I mean, you looked at it before too, very briefly, I think.
No, I never really looked at Puerto Rico.
You didn't? Oh.
People told me about it.
Yeah.
And I've talked to people, but I've never thought about, hey, what does it look like? Should I move there? Yeah. There's better ways to save on taxes. The easiest way to save on taxes is reinvest your money. And reinvesting could be hiring more people, which is an expense, or it could just be buying corporations, which gives you depreciation, right?
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I, I think with I think more long-term, if you look at the biggest companies in the world, they're not built in places like Puerto Rico. I'm sorry, right? I'm not trying to talk crap on Puerto Rico. It's just, it's hard to build a large organization in one of those countries. And I'm not saying Eric and I have built large corporations either, but we're trying to. And you have a better shot of doing that where you can find amazing talent.
Yeah. The ones that typically move there, by the way, it's like you have investors that live there, a lot of investors, whether they're Wall Street types or crypto types.
Yes.
And it's fine. Again, like we're not poo-pooing on it. It's just, at least for me, I didn't, I didn't think I'd be happy there. So that's what it is.
Yeah.
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