As we spring into a new season it is clear that affiliate marketing has growing importance and that it is fast becoming an essential part of today’s marketing toolkit
It has been a challenging 12 months for the global economy. Dive into any sector, from property to banking, finance or retail and the cracks caused by the recession were easily visible. News of economic failure dominated headlines for months and for a time the outlook seemed rather grey and none more so than in the UK retail sector which saw the closure of a number of familiar High Street names including Woolworths and Borders. However, it is not all doom and gloom and while in retail the high street may have suffered, online has actually thrived thanks, in part to the growth of performance marketing practices.
Finding the cash cow
Businesses have started to explore opportunities online, with many increasing their web presence and developing tactical internet marketing strategies to entice consumers to their sites. One of the most cost effective, measurable and simple ways of doing this is by investing in an affiliate marketing campaign. The success of performance marketing tactics like this is reassuring at a time when businesses are looking to recover from the damages caused by the recession as quickly and efficiently as possible.
It is here that practices such as affiliate marketing compliment the current consumer trend to shop online and provides marketers with a range of channels to reach the consumer. Whether it is through the use of voucher and cash back sites which have had a marked impact on consumer purchasing behaviours, – UK internet searches alone for vouchers grew by 47.5% from August 2008-August 2009 (Experian Hitwise) – to blog, editorial and review sites where consumers go to seek opinion or advice on the best product or service to buy, there are a whole plethora of new avenues for marketers to explore with affiliate marketing.
Affiliate marketing is highly measureable and this matches the quest by marketers for achieving Return on Investment (ROI). It is precisely this quality that is making many marketers sit up and pay attention and a theme that was vocalised through our recent survey carried out at TFM&A. The survey revealed that a more positive outlook is forecast for the marketing sector as a whole with over half of respondents (59 per cent) stating that 2010 would bring more performance based marketing. Indeed 34 per cent said there would be a greater emphasis on measurement and ROI and 25 per cent thought there would be an increased focus on targeted campaigns rather than mass-marketing techniques.
Qualities such as the ability to measure campaigns and monitor the flow of traffic also make affiliate marketing an attractive option for marketers. Additional features of affiliate campaigns such as tracking technologies – which create links from one website to another – have the added advantage that advertisers and publishers can see who is clicking through to their website and also see which website they clicked through from. It is this type of information that helps marketers hone and refine every element of their campaign, ensuring that it is as timely as possible. The figures speak for themselves; affiliate marketing today accounts for 10 per cent of online sales, a figure that is only set to grow over the next twelve months.
Making affiliate marketing work for you
Implemented effectively, affiliate marketing can be a rewarding and indispensible digital marketing tool for businesses, but what kind of rewards can marketers expect to enjoy?
Perhaps the most significant of these is the ability to gain access to a new group of target customers – a requirement that is central to every element of marketing today. Find the right customers, study how they behave, set realistic goals and you have the essential ingredients for a strategic and well-informed marketing campaign that can deliver on and hopefully exceed expectations.
Affiliate marketing works by providing advertisers with a cost-effective and measurable way to influence consumers while they shop. It also influences the decision-making processes by increasing advertising presence across a number of sites. So success here will largely be determined by the strength and quality of the affiliate partner’s network field and also by the technology that powers the site. Establish this and it is possible to generate the most return in terms of traffic.
Affiliate marketing in 2010
We believe the groundwork is in place for affiliate marketing to transform the way marketers use performance marketing in the next few months. However, success will depend on keeping a close eye on consumer behaviour to keep strategies up to date. For example, our research indicates that consumer habits are expected to remain largely the same, with 66 per cent of the marketers we surveyed, agreeing that consumers will stay with their new ‘bargain hunting’ habits even post-recession. For the savvy marketer this means working with an affiliate network to ensure placement on relevant publisher sites that are offering consumers the best value for money, including voucher sites such as Hot Deals UK or My Voucher Codes.
Another area that should be observed closely is the realm of social networking. Here, social media is unsurprisingly, still a hot topic with marketers. Almost three quarters (74 per cent) of respondents at TFM&A said social media would have the most influence on digital marketing campaigns this year. This was followed by online vouchers and offers at 17 per cent, again reflecting the continuance of the price conscious consumer.
It is also important for marketers to look at wider issues and events that impact consumer purchasing behaviour. A good example is Valentine’s Day which helped online retailers recover from a disappointing January, with a record £4.1bn spent during the month. According to recent figures from the IMRG Capgemini e-Retail Sales Index, online sales grew 13 per cent, up £3.6bn from the previous year. Unsurprisingly here, lingerie and beauty products performed particularly well. Armed with this information, brands can make sure they are also working with affiliate networks to optimise campaigns to full effect.
The future is affiliate
Performance marketing is an attractive option for marketers looking to increase ROI and with many marketers adjusting strategies in the wake of widespread budget cuts; attention is turning towards affiliate marketing. As many marketers fine tune their online initiatives over the course of this year, we expect to see affiliate marketing grow from strength to strength. Affiliate programmes can provide an excellent opportunity for businesses on tight budgets, by helping brands to increase their online brand presence in a way that is measurable and is proven to increase revenue.
In a world where the next change is just around the corner, it is vital that businesses move with the customer by shifting budgets online and implement measurable campaigns that deliver the desired returns. Online channels allow businesses to respond quicker to what consumers want and engage with larger audiences, for businesses looking to maintain their competitive edge and continue to be profitable affiliate programmes should be high on the agenda for every marketer.
Liane Dietrich
Managing Director
LinkShare
www.linkshareblog.co.uk
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