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Affiliate Marketing drives more than £3bn sales

Affiliate Marketing drives more than £3bn sales

The UK market for affiliate marketing grew by an estimated 45% in 2007, taking the total value of online sales generated by this channel in 2007 to more than £3 billion.

That’s according to research newly published in E-consultancy’s Affiliate Marketing Networks Buyer’s Guide.

The £3.13 billion total for 2007, compared to £2.16 billion in 2006, illustrates the healthy state of this digital sector which will continue to grow strongly during 2008.

Sectors such as retail, travel and financial services continue to be the bedrock of affiliate marketing, with both Blue Chips and SMEs ramping up their investment.

Headline market trends include: Blue chips and SMEs continuing to invest as the sector matures; cashback sites gaining ground while paid search affiliates decline; more merchants, networks and affiliates grasping the importance of communication; and, agencies playing an increasingly important role in affiliate marketing.

E-consultancy’s Head of Research, Linus Gregoriadis, said affiliate marketing continued to gain momentum because the performance-based model was so popular with advertisers.

“When the biggest consumer-facing brands in these industries do not have a well-defined affiliate strategy, it now tends to be an exception rather than the rule,” he added.

“The whole industry is getting more professional and 2007 was definitely a big year for affiliate marketing. The channel has become much more strategic and boardrooms are starting to take notice. Media agencies are becoming increasingly involved in this sector as a consequence of its increased profile. ”

According to the research, commissions and fees paid out to affiliate networks (covering payments for both networks and affiliates) amounted to £186 million in 2007, up 40% from £133 million in 2006 (and compared to £83 million in 2005).

The growth of affiliate marketing reflects the buoyant nature of online retail in the UK.

According to the IMRG, the UK’s online retailers generated some £46.6 billion in sales last year.

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