Do Display Ads Affect Affiliate Revenue?

A few years ago you’d rarely find a pure affiliate site that also had display ads on it. Display ads like Adsense were mostly used by larger media publications, or by beginners who were happy to earn small amounts.

Adsense paid pittance, and would mess with your site speed and UX. It wasn’t worth sacrificing user experience in exchange for pennies on the dollar. 

Additionally, Adsense would take clicks away from your affiliate links. 

That was common knowledge.

It wasn’t worth reducing your affiliate sales in order to make a few dollars per month extra. 

Unless you had hundreds of thousands of pageviews per month in a niche where there weren’t many affiliate commissions to be had, you just didn’t pay attention to display ads.

The thing is though, common knowledge is usually not accurate.

Since about 2017, I’ve been paying more and more attention to display ads. Thanks to companies like Adthrive, Mediavine, Ezoic, and a few others, display ads are much more lucrative than they used to be.

Even in the current pandemic, with vastly reduced earnings, advertising can still be incredibly lucrative.

More and more affiliates are putting display ads on their sites, and a large amount of them are limiting the display ads to the informational “non-money” content.

This is a safe option, since it’s not going to take any commissions away from your affiliate income. 

It might not be the best option though, because your informational content is typically going to generate less money from display ads in the first place, and might not get much traffic either, but at least it protects your affiliate earnings.

What Our Tests Showed

So here’s the knowledge-bomb.

Based on our testing across dozens of sites, we’ve never actually found display ads to reduce affiliate commissions.

We started out by thinking we’d see some dip, but that the dip might be offset by the ad income and our overall revenue would increase.

For example, a money page that made $300 per month without ads, maybe with ads it would make $200, but the ads would generate $150, and we’d come out ahead.

We tracked how much money a page made without ads, then put the ads on for the same number of pageviews, and all that happened was we made money from the ads. Affiliate commissions actually stayed the same.

Now, this wasn’t a perfect test because it wasn’t a split-test. Maybe the second period was a higher period of buying activity and we would still have earned even more without the ads.

Maybe, but we’ve done this test at least a dozen times and always seen the same results.

I asked the CMO of Ezoic for his input, and he took these thoughts further. He actually pointed out that EVERY element on a page has the ability to affect both display ads and affiliate income.

This is a good point, because while we’re often worried about how the addition of banner ads will affect our affiliate sales, we rarely pay much attention to things like font size, CTAs, theme design or choice of image, which can also have a negative effect on conversions.

Here’s what Tyler said to me:

Everything on the page that is designed to garner the visitor’s attention, or engages the user, has the potential to dilute the value of something else….ads dilute the value of other ads — advertisers bid less if ads impact the CTR, viewability, CPA of other ads.

• Affiliate ads impact the value of ads — see above
• Ads can affect affiliate revenue — CTR, bounce rates could be increased, etc
• But, the content itself… social media widgets… newsletter sign-ups…. all these things have the ability to impact a visitor’s engagement.

Realistically, the impact and value added by these things is incremental; meaning that in most cases there is a nice balance where the value in terms of revenue can be purely additive. That said, testing is needed and you need to be able to take control of these things yourself.

Essentially then, everything has an affect, but only testing will show if the overall revenue is less or more. It’s not possible to simply say “Display ads harm affiliate income” then.

Also, why would you assume that someone who is looking for a product recommendation is going to click an ad instead of leave the site? How often do you do that yourself?

Even though people have shorter attention spans now, especially online, it seems like common sense that if they’re on your article looking for a product recommendation, they’re more likely to click an affiliate link to check out a vendor, than they are to click a random retargeting ad that’s followed them around the web. 

At least, the highly engaged visitors who were going to earn you an affiliate commission would anyway. Everyone else is welcome to click that ad.

What About Speed?

Another common argument against display ads is their effect on site speed. In the context of affiliate income, it does make sense that a slower site will have a negative impact on affiliate commissions, and may even lead to a worse SEO experience. 

Speed is a whole other topic though, and there are plenty of articles about speed already. Here’s one from Adthrive, and one from Ezoic. 

In short, I don’t believe it’s a given that ads will ruin your site speed, as long as you set them up (and your site) properly.

Should You Always Use Ads Then?

Now, there ARE a few situations where ads might not make sense. Those situations would be where you have a small amount of traffic, and HUGE affiliate income.

We have one site that makes $30,000 off 30,000 pageviews. We’re not going to put ads on that site. We have another site that makes $10,000 p/m off 40,000 pageviews. We did put ads on that site, but it made us nervous. What if it turns out Google DOES hate display ads and we risked $10k/mo in exchange for $400/mo?

So, when the affiliate income is so large that display ad revenue won’t put a significant increase, then you may want to consider holding off. Otherwise though, if you can increase your site revenue by 25-100%, then it’s absolutely worth considering.

However, you will want to do a test first, to be sure.

1. Use unique tracking IDs on your top pages so you can see how much revenue they’re driving. 
2. If possible, split-test with/without ads for a significant amount of traffic (1,000 pageviews minimum)
3. If not possible, just run a sequential with/without test for the same amount of pageviews (1,000 with, 1,000 without).
4. Make sure your site speed doesn’t increase and bounce-rates doesn’t decrease too dramatically.

While you’re at it, test other elements on the page as well (in separate tests for clarity). Ad revenue can be one of the best forms of income, and writing it off without testing it can be a mistake.