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"The Value Chain" for Affiliate Marketing

by Calamaroo
6 replies
This was the "value chain" of the "traditional" business as first pointed out by Michael Porter back in the 1980s.


As you can notice, there were the primary activities of inbound logistics, operations, outbound logistics, sales and marketing. Then above that, you have the support activities.

I'm sure that the value chain still applies to the giant manufacturers of today. But how would you say the "value chain" of an internet affiliate marketer would look like?

What would be the primary activities? The support activities?

How would you put keyword research, domain name decisions, in-site seo, link building, article marketing, social media, website content, in their proper place and order in the affiliate marketer's value chain?

I know this is kind of getting theoretical but as General Patton used to say, "The principles for managing an entire army are the same principles for managing a small platoon".

An affiliate marketer would have a value chain of some sort too, right?
#affiliate #marketing #the value chain
  • Profile picture of the author MichaelHiles
    You made it onto my "they get it" list.

    Marketing is an extension of other core business systems that go into effect when someone buys something.

    Sadly, this discussion is WAAAAAAAY over the heads of most of the members of WF.
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    • Profile picture of the author AllAboutAction
      Originally Posted by Calamaroo View Post

      What would be the primary activities? The support activities?

      How would you put keyword research, domain name decisions, in-site seo, link building, article marketing, social media, website content, in their proper place and order in the affiliate marketer's value chain?
      Great post. Very thought-provoking.

      I think that an answer to the question requires a definition of what the "product" is that you are offering. To figure that out you need to see where you are adding value. For example, if I'm collecting products and information about those products, presenting those products to a customer, then passing the customers on to retailers, I might define my product as "selection and presentation of available products". Perhaps even "a system that finds buyers for sellers".

      Then, follow the money. Your primary activities would look something like: Find a market, select products to sell to that market, present those products to the market, then direct customers to the corresponding retailer of the product of their choice. You've got service too, dealing with buyers and sellers alike.

      Because many of the things that you mentioned are used in the above sequence, I would label things like keyword research, domain selection, and website content as actually belonging to primary activities and not support (R&D) as a first glance might indicate. If a website was your product, these might be considered R&D, but I think for the affiliate marketer these are part of ongoing operations to continually match buyers and sellers. Support activities would include things like web hosting and autoresponder services (but not the content presented by them).

      Things like a link-building services feel like more of a gray area. Is it primary (marketing) or support (procurement)? On one hand, you could call it the "finds buyers" part of your product, on the other hand you could just consider it a buying a necessary commodity to be used to make your real product (getting higher SERPS which does the real task of finding buyers).

      It's a good discussion, and one that might provide some good insights on where to spend your resources. For example, if an activity isn't really primary to your business, do you really need to be doing it yourself or spending so much time on it?

      Another interesting discussion is the way an affiliate marketer's entire value chain packs up and fits into someone else's value chain in the "Marketing and Sales" box in the above diagram.
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      • Profile picture of the author Calamaroo
        Originally Posted by AllAboutAction View Post


        Another interesting discussion is the way an affiliate marketer's entire value chain packs up and fits into someone else's value chain in the "Marketing and Sales" box in the above diagram.
        It seems like, in the big picture, the affiliate marketer is just an independent contractor (paid in straight commissions) of the "Marketing and Sales" box of someone else's value chain whose other activities (order processing, refunds/returns, delivery) are also outsourced to others.

        Then the pertinent question, from the affiliate marketer's perspective, is what are the specific activities that make up his own value chain. It seems like at its most general, it's just traffic generation and conversion and repeat business. So then, what are the specifics of that and it what order? And which are the most outsourceable.

        A good philosophy would be to think of one's affiliate marketing business as part of a bigger entity and chunk down from that entity down to one's circle of influence. But also seeing the big picture while grinding out the details. Kinda like the stonecutter who saw his specific job in light of the cathedral that he was a part of making - as opposed to just "making a living" and/or just "trying to do the best job of stone cutting in the entire county". The stonecutter that kept the cathedral in mind had the biggest chance of becoming a senior manager - even though he was just as much of a stonecutter as the ones who were stone cutting to "make a living" and stonecutting "trying to do the best job of stone cutting".
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  • Profile picture of the author elyshemer
    Every business will have it's own value chain.

    An affiliate marketer may be an independent contractor in someone else's business but he do have a business of his own and thus his own value chain.

    Someone before me said: "I think that an answer to the question requires a definition of what the "product" is that you are offering". The value chain applies to the business and not a particular product.

    The value chain talks a bout TYPE of activities and not specific activities therefore it will have pretty much the same activities as the original, only scaled down to the size of business the affiliate marketer has.

    The activities themselves are different than those carried out in a traditional business, as Calamaroo pointed out. He also very well quoted: "The principles for managing an entire army are the same principles for managing a small platoon".
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    • Profile picture of the author MichaelHiles
      Originally Posted by elyshemer View Post

      Every business will have it's own value chain.

      An affiliate marketer may be an independent contractor in someone else's business but he do have a business of his own and thus his own value chain.

      Someone before me said: "I think that an answer to the question requires a definition of what the "product" is that you are offering". The value chain applies to the business and not a particular product.

      The value chain talks a bout TYPE of activities and not specific activities therefore it will have pretty much the same activities as the original, only scaled down to the size of business the affiliate marketer has.

      The activities themselves are different than those carried out in a traditional business, as Calamaroo pointed out. He also very well quoted: "The principles for managing an entire army are the same principles for managing a small platoon".
      One of the things that I cover in Kaizen Marketing Blueprint is the fact that the TYPE of activities that you do in each segment of your marketing... the tactical level... have to fit into an overall framework or process of management that is independent of the techniques. The tools change... for example, we're in the midst of another major shift to mobile platforms. But the management principles are the same across the board. Every business does things to Find customers, Win customers, and Keep customers. Those three categories of activity are the foundation to the management model.
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  • Profile picture of the author Big Al
    Yep ... over my head I'm going back to doing in my small little world ...
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