Pascal Fantou is becoming one of my favorite bloggers. If you can read German you should check out his latest post on the future of the affiliate industry in Germany. I’m not 100% sure if things are going to change as drastically as predicted, but I can definitely see Pascal’s points. Here’s a short summary in my own words:

Advertisers usually group their online marketing teams mainly by traffic source: search marketing, display campaigns, affiliate marketing. Back in the dark ages affiliates were primarily web site owners who would place text links or banners on their own sites to make some extra cash. These days many affiliates have turned into full-time entrepreneurs who have expanded their dominance also to search engines and social media.

Pascal’s point is that the media agencies and not the affiliates will be the key players in the future. They’re in close contact with the advertisers, they administer the big budgets and they’re actually becoming better at what they do. At the same time, small- and medium-sized advertisers will run their activities more and more in-house instead of through an affiliate or search marketing agency.

So what will happen to affiliates? A lot of their territory will be taken away by large agencies or the advertiser itself. For example in search marketing, why should advertisers pay for the profit of the affiliates and the affiliate networks if they can pull the sales in themselves? In some cases that would lower the cost of acquisition by 50%. Same thing with Google. They’re going after affiliates big time these days because they want the other 50% of the advertiser’s budget.

With the redundance of traditiional affiliates, especially in search marketing, the traditional affiliate networks are going to be dinosaurs. If they’re not changing their role to a technical solution provider they’re likely to die out. The winners are going to be the media agencies. They can combine large budgets of several advertisers and that way pay a lot less for ad network traffic.

The key to survival and growth for affiliates is specialization. Affiliates need to find niches where they do not have to compete with large advertisers and agencies. How about mobile?