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, titled Affiliate Marketing Networks - A Buyer's Guide.
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 second 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.
Which networks are featured in the buyer's guide?
AffiliateFuture, Affiliate Window, Brand Conversions, Buy.at (Perfiliate Technologies), Commission Junction, dgm, Online Media Group (OMG), Paid On Results, Silvertap, TradeDoubler, Webgains.
E-consultancy is the UK's leading online publisher of best practice internet marketing reports, research and how-to guides. It also publishes buyer's guides and has a directory of 100,000+ third party internet marketing white papers.
Since moving to a paid-content model (March 2003) E-consultancy has amassed thousands of paying subscribers, around 30,000 registered users and 115,000 unique users sessions per month. Its weekly newsletter is sent to 18,000 e-marketing professionals. Subscribers pay from £99 per year to access the exclusive and highly practical content, which helps internet marketers get the most out of their websites.
E-consultancy events include roundtables and monthly 'Supplier Showcases', where six suppliers pitch to an audience of pre-qualified buyers in a Central London venue. E-consultancy also provides a range of in-house training programmes, such as seminars and workshops, and has recently launched a new media jobs channel to help internet teams find new recruits.
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Affiliate Marketing Networks - A Buyer's Guide (2005)
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Internet Statistics Compendium - August 2005
Online Advertising Networks - A Buyer's Guide 2005.