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UK affiliate marketers to generate more than £1bn in sales in 2005
Sales generated for e-commerce organisations by UK affiliates in 2005 are expected to double compared with 2004, according to a new E-consultancy report
UK affiliates are expected to account for between £1.1bn and £1.35bn of sales for merchant partners in 2005, up from around £600m in 2004. This far outstrips the growth rates for both online advertising and search engine optimisation, which E-consultancy expects to grow by 32% and 70% respectively.“For the seco
nd year in a row we're seeing major growth in sales driven by affiliates, who are themselves becoming increasing savvy as internet marketers,” said E-consultancy CEO Ashley Friedlein.“Affiliate marketing is becoming a real no-brainer for many businesses looking to drive online sales while avoiding the usual risks associated with online and offline marketing.”
The 2005 buyer's guide features in-depth profiles of the key UK affiliate networks, to help retailers and other e-commerce organisations identify the right network/s to use for their affiliate campaigns.
Key affiliate marketing trends in 2005
• Sectors with the heaviest growth rates include financial services, gambling, telecoms, entertainment, travel and consumer electronics.
• Affiliate marketing remains largely consumer-focused, rather than business-focused.
• Best performing merchants are flexible and nimble, with good creative support for affiliates.
• Affiliate marketing is outsourced to agencies by 15% of merchants.
• Networks expect consolidation “within the next few months”.
• Merchants need to work at eliminating duplication when paying fees, by improving tracking.
• Affiliate growth outstrips SEO (up 70% in 2005) and online advertising (up 32%).
What is affiliate marketing? • Affiliate networks match advertisers (merchants) with publishers (affiliates), with the former paying commissions when referred visitors from publishers buy products.
• Affiliates can expect to earn total fees of around £83m in 2005, with average commissions ranging between 5% and 8%, although it varies from sector to sector.
• Many affiliates are skilled at search engine optimisation, particularly using paid-search networks such as Google Adwords. This helps attract targeted traffic for merchants, improving conversion rates.
• Affiliate marketing is thought to have been started by Amazon founder Jeff Bezos, who created the Amazon Associates programme to help boost sales. Advertisers (merchants) only pay fees when leads/visitors become customers, making affiliate marketing one of the most low-risk of all online marketing strategies.
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