Affiliate Mktg: worth £17bn to uk ecommerce

**Helen** · 10-05-04

Thought this might be of interest.....

Helen x

07 May 2004, Precision Marketing
Affiliate marketing, one of the most direct forms of online advertising, is expected to more than double its turnover by the end of the year.
The total value of sales generated through affiliated networks is predicted to reach £600m in 2004, according to research by online specialists E-Consultancy.
If the prediction proves to be accurate, affiliate networks would represent 3.5 per cent of the UK e-commerce market, which is estimated to be worth £17bn.
The mobile phone, financial services and travel industries are expected to be the fastest-growing areas, while the adult, gambling and retail sectors are investing most heavily in affiliate marketing.
The report also shows that while big brands continue to lead the way in total spend on affiliate marketing, small- to medium-sized businesses do not always have the resources or expertise available to run an ongoing programme.
Ashley Friedlein, chief operating officer at E-Consultancy, says: "The key trend for affiliate marketing will be its increased integration into the overall marketing mix.
"Within a year, the medium will be judged not just according to the quantity of sales it can deliver, but also the long-term value it can deliver and its efficiency of marketing spend."

**Bezza** · 10-05-04

Thanks Helen - excellent timing for a presentation I am doing at the moment.

Although I read it that the UK ecommerce market was worth £17bn, £600 million of which was generated through affiliate networks (i.e. 3.5% of 17bn)? Lots of £000's either way though

Cheers
James

**pistol101** · 10-05-04

I wonder how accurate the figures are will it change when all those stolen transactions from merchants are added back.

**getvisible** · 10-05-04

Although I read it that the UK ecommerce market was worth £17bn, £600 million of which was generated through affiliate networks (i.e. 3.5% of 17bn)? Lots of £000's either way though

nah Bezza

its 3.5% of the e-commerce market - that includes site design, consultancy, seo etc.

and I'm sure us affiliates will try and help the scumware-free networks get as big a part of that 3.5% as we can.

**Rich** · 10-05-04

Hmm, £600 Million * say 5% = £30 million ish for us affiliates (Hope you like your new car Aquanuke!) and £9 million ish for the networks to fight over.

It also says that value has more than doubled since last year which, by my calcs, means if you did £10K/month you were doing about 1% of total affiliate sales!

Ok, there are lots of assumptions in that, but it shows how big some of the big playes on this forum are.

**getvisible** · 10-05-04

£30 million ish for us affiliates

yeh I was wondering what proportion of all affiliate revenue I do. But I reckong £30 million is a good assumption.

at £20k/m its approacing 1/4 million and there must be at least 30 affiliates on that. (tot £7.5m)

I'd also say about 10 on £30k/m (tot £3.6m)
7 on about 40k/m (tot £3.3m)
4 on about 50k/m (tot £2.4m)
3 on about 60k/m (tot £2.2m)
and the rest up here about £3m between

so that makes £17.6m and so £25m-£30m is a good figure???

**Rich** · 10-05-04

so that makes £17.6m

Does it? Its probably just me going number blind after seeing all those mentions of 10's of K's per mth

.

**getvisible** · 10-05-04

nah you are right, I've just worked out the top earners and the others that do a bit (all earnings are respectable) fill in the rest.

I just read what I wrote

and so £25m-£30m is a good figure???

I didn't mean to say your figures were out, I mean't to say "does anyone else agree?"

lol - ok Lee shut up now.

**lowndsy** · 10-05-04

Is there an URL for that article?

**pistol101** · 10-05-04

Sounds like you've just added together the turnover of the networks that publish results. I'm not sure it's very accurate as there are some huge independent programmes flying around. They've quoted figures for 2004, and the market is growing very quickly.

**Green2K** · 10-05-04

Interesting bit of analysis. I think Pete pretty much hit the nail on the head.

From personal experience, some of the indy's are huge.

Earning $60k+ a month on a single merchant is possible.

I also know of two UK affiliates (who aren't on this forum) who are regularly earning £100k+ a month without touching the networks.

Green2K.

**ashleyf** · 11-05-04

Hi all

As co-author / Editor of "Affiliate Marketing - A Buyer's Guide", the report from which Helen has published the press release headlines, I thought I could clarify a little further.

The market valuation figures are based on talking to all the (larger) ASPs and asking for their own forecasts for 2004. As has been pointed out, this figure misses out independent programs, white label and self-administered schemes, so, if anything, underestimates the full amount. It is also a 'best guess' based on the ASPs own estimates and, as has also been said, things are changing / growing so fast that the figure is not likely to remain valid for long.

The point we really wanted to make is that a) affiliate marketing is growing fast and b) it still has plenty of room to grow. Further research we've done (and are about to publish) shows many retail sites getting around 20% of their online sales from affiliates. If affiliate marketing only accounts for 3.5% of total online sales at the moment then we've got plenty of room for growth as affiliate marketing enters other sectors.

We're hoping to get a feature in the FT based on our research which should raise the profile of affiliate marketing generally in the UK in the business world.

I've attached a sample from our guide (the full version is available from our affiliate marketing page but is subscriber access only) which contains a lot more details than the original press release.

Ashley

**Supercod** · 11-05-04

Bit pointless Lee, everyone seen it already, they are the ones that put forward the clients name after all

Anyway the one thing I think we have to thank the writers of this report is that they did not fudge the issue of spyware in the report, so to new merchants reading one of the first thing I be asking any network (amongst others) is what policy they have on spyware "affiliates".