Product category:
Affiliate marketing
News Release from: buy.at | Subject: Affiliate marketing research
Edited by the Marketingservicestalk Editorial
Team on 24 January 2008
Affiliate marketing experiences dramatic
growth
Affiliate marketing is experiencing dramatic growth in the UK, according to figures out today from E-consultancy, whose buyer's guide reveals a GBP3billion industry.
The findings are echoed by the UK's largest independent affiliate network, buy.at, which has seen turnover increase by 70 per cent Kevin Cornils, CEO of buy.at, explained: "Performance marketing has grown as marketers increase their knowledge of new marketing channels and demand greater efficiencies from their online activity
This article was originally published on Marketingservicestalk on 21 Feb 2008 at 8.00am (UK)
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Kevin Cornils, chief executive of affiliate marketing specialists buy.at, looks at the growth of cost-per-action payment models over cost-per-click for search services.
"Search engine marketing has arguably reached its peak but affiliate marketing is still in a high-growth phase with 78 per cent of merchants planning to increase their spend.
"Merchants and their agencies are gaining expertise and becoming increasingly strategic in their use of the affiliate channel.
"We have seen investment increase by approximately 70 per cent on our network over the past year with brands such as John Lewis, MandS, Egg, Virgin Media and British Telecom adopting our innovative technology, such as dynamic product feeds to affiliates, combining different affiliate segments to maximise CPA and improving their tracking and analysis of the results.
Further reading
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The travel industry is making the most successful use of affiliate marketing, according to research from E-consultancy.
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Affiliate marketing has become a crucial area of business for many digital agencies, with 85 per cent saying they now manage more affiliate marketing than they did two years ago.
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"This represents a huge opportunity for both affiliates and marketers that understand the channel and appreciate the benefits of true pay-for-performance advertising".
The report from E-consultancy follows research sponsored by buy.at, which discovered that 78 per cent of merchants had increased their spend on affiliate marketing between September 2005 and September 2007 and the same percentage planned to increase it further in the next two years.
Some 75 per cent of gaming companies said they had increased spend since 2005, followed by 71 per cent of travel companies, 68 per cent of financial services companies, 64 per cent of telecoms specialists and 62 per cent of retailers.
Some 85 per cent of the UK agencies surveyed by E-consultancy confirmed that they now manage more affiliate marketing for clients than they did two years ago with the channel representing 20 per cent of turnover.
In total, 92 per cent of agencies expected to be managing more affiliate marketing in two years' time, and 90 per cent of them see affiliate marketing is a way of growing their agency or differentiating it.
One reason for growth is because the channel is the most cost-effective channel for driving customer acquisition.
The research found that 95 per cent of UK advertisers (merchants) said that it is 'very cost-effective' or 'quite cost-effective' for acquiring customers.
Paid search was seen as the second most cost-effective followed by email marketing with these marketing channels viewed as 'very cost-effective' or 'quite cost-effective' by 90 per cent and 82 per cent of merchants respectively.
Affiliate marketing was also revealed as a highly effective channel for driving volume with three-quarters of respondents (73 per cent) saying that it drove either 'high volume' or 'medium volume'.
The travel industry was found to be making the most successful use of affiliate marketing.
A total of 239 UK merchants completed the survey in September 2007.
Half of the respondents who were aware of their company's turnover said it was in excess of GBP50 million per year.
A group of 100 agencies completed the Affiliate Marketing Agency Survey.
Cornils concluded: "Affiliate marketing has proved itself as a particularly cost-effective way to drive a volume of customer acquisition which has resulted in increased investment in the channel.
"We have had a particularly successful year at buy.at with new customer wins including Match.com, dial-a-phone, Seatwave, O2 and BT; we have also developed new partnerships with Atlas and Doubleclick, launched new technology, acquired a lead generation company, recruited industry experts such as Louise Green from OMG and expanded our network into the US.
"We expect this growth to continue even faster in 2008 as technology and account management become more sophisticated and affiliate marketing becomes an increasingly strategic marketing channel for UK businesses".
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