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Industry Research


Affiliate marketing spend up

Affiliate marketing spend up

Affiliate marketing is growing with strong opportunities for further growth according to research from E-consultancy.

The survey found that a resounding 78 per cent of respondents said they had increased their spend on affiliate marketing compared since 2005 and the same percentage said they plan to increase it further in the next two years.

Nearly a quarter of those who are spending more in the channel say that they have doubled their spend in the channel in the past two years and a further one-in-12 advertisers (merchants) had increased it by 200% more.

Two thirds of respondents said the number of sales generated by affiliate marketing has increased over the past two years.

Furthermore, 40% of respondents have more people employed to manage their affiliate marketing activity compared with two years ago and half of those surveyed expect this team to grow over the next two years.

Head of Research at E-consultancy, Linus Gregoriadis, said ‘We believe this is the most comprehensive UK survey into how companies are using affiliate marketing.

“The findings reveal an industry that is still expanding rapidly, with further growth expected as merchants seek to get maximum returns from this channel.”

Barriers to success

The survey highlights a consistent message that brand owners think they could still get more from their affiliate marketing activity with four out of five merchants saying ‘I wish I could get more out of this channel’ and 31per cent of merchants saying they wish they could get more out of the combination of affiliate segments they use.

The biggest barrier to success however is considered a lack of internal resource with a third of merchants citing this as an issue. Problems with tracking are seen as a barrier by half the sample.

A third of merchants surveyed agreed that spend in the channel is held back because they simply don’t know how much incremental volume it will deliver. Respondents also saw ‘difficulty attracting affiliates’ and ‘websites which don’t convert traffic very well’ as barriers.

Only 13 percent of merchants say they have good communication with all their affiliates and a network’s relationship with its affiliate base is deemed the most important consideration when choosing a network with almost half the respondents ratings it ‘extremely important’.

Evidence of the increased professionalism of the channel is borne out by respondents with 38 per cent of them saying ‘the affiliate marketing channel is becoming more mainstream and professional’ with half of the sample say, ‘it’s changing but there is still some way to go’

Vertical growth

68 per cent of marketers in the financial services sector said they had invested more in affiliate marketing with half of them more than doubling their spend in the channel in the past two years. 72 per cent of them plan to increase this over the next two years.

75 per cent of gaming companies have increased spend since 2005 along with 62% of retailers and 64 per cent of telecoms companies and 71 per cent of travel companies.

Twenty per cent of telecoms merchants had at least doubled their spend on affiliate marketing as had over a third of travel companies, but charities, utilities and gaming merchants had all increased their spend by at least 100 per cent over the past two years.

A total of 239 UK merchants, completed the survey in August and September this year, and 76 per cent of them were business which operate both on and offline.

Half of the respondents who were aware of their company’s turnover said it was in excess of £50 million per year.

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