Affiliate Article in June's Revolution

[getvisible]

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Looks like there's a nice big "report" on affiliate marketing.

Ads from TD, buy.at netkilix.

just lets see if there's any mention of spyware.

Synopsis:

- TD says that e-commerce is growing because of greater broadband penetration, consumers being more educated about internet security, and a fundemental shift to the internet for consuming.

- Online marketing only accounts for 1.3% of all ad budgets whilst it accounts for 10% of all media consumption and 7%+ of all sales during the Christmas period.

- Search and affiliate marketing not only generates a greter ROI but also increases reach.

- E-consultancy says that during 2004 £500-600m of sales will be generated through the networks.

- Many networks estimated revenues will grow 40-75% this year

- IMRG estimate e-commerce will top £17bn this year with up to 3.5% being conducted through affiliate marketing (average)

- Calculating ROI of affiliate marketing should be not only made on traffic numers but also the worth of the traffic.

- Commission rates should be set at a profitable rate and could consider the lifetime value of the customer.

- TD's Will Cooper sas its easier to establish the worth of affiliate marketing than other marketing approaches.

- This is why, he says, Affili marketing has grown whilst other methods have been under pressure.

- Our Graham Keen says that you have to do the sums and not "just pluck a figure out of the air".

- Says that he wouldn't use more than one network at a time becuase of publisher cross-over.

- According to the larget networks, less than 5% of their advertisers take a multi-network approach.

- John Woods at Sitel Intelligence says that a multi-network approach increases management burden and could harm ROI as
you could end up paying for multiple commissions.

- Susan Kingston (CJ) says this risk is small and networks should play by the rules.

- Savvy publishers use SEO

- Many bid on terms using cpc so they should be kept up-to-date

- Affilaites are becoming astute - Neil McKay MD at Global Media and communication is key.

- Different approaches for commissions can take place in the same industries such as PPL (newsletters, application) CPC, CPA (sale value) etc

- Comet says that affiliate marketing is a low risk approach but affiliates should not be there simply to add cookies to users that were on their way to the site anyway. - Tim Woollias Commercial General Manager

- Comet says that affiliate marketing is no longer the cheapest channel as the price commarisson and paid search models mature.

- DGM says that merchants should work with selected affilaites to offer product databases.

Will do some work then continue on to the section about using affiliate marketing to target specific demographics.

[aly]

Thanks Getsvis

Interesting stuff there

Cheers
Aly

[Graham@Buyagift]

Says that he wouldn't use more than one network at a time becuase of publisher cross-over

Not exactly what I said - the gist was if you run a good program the affiliates will come to you - so imho you don't need to run on multiple networks for a reach perspective.

Graham

[Qui Gon Jinn]

Curious on the quotes from Comet?

[morleymouse]

I think Comet are right about the PPC, if done right PPC is more cost effective than affiliate marketing. If not how would so many affiliates make money from sending customers to merchants via PPC. Just with affiliates doing it they don't take no risks.

Be a bit scary if they just drop the affiliate program and decide to get in a PPC team.

But regarding the price comparison model, arn't these mostly just working on commission anyway, ie its just another approach on affiliate marketing.

Just my thoughts
Dan

[watcher]

Don't understand Comet's remark on affiliate marketing not being the cheapest route as price comparison and PPC matures.

A price comparison site run by a CPA affiliate is almost certainly going to be cheaper to generate sales than one that charges on a CPC basis.

And, along the same lines, paying for CPA sales while the CPA affiliate pays for PPC traffic must be a safer and more economic route for a merchant.

Added after reading Dan's comments above:

Affiliates who are paid on a CPA basis and aquire their traffic vis PPC are highly incentivised to find the most efficient keyword/negative keyword combinations - get it wrong and they certainly won't make a profit - although the merchant still gets whatever sales were generated.

On the other hand a salaried in-house PPC team or fee based PPC management company will not be as incentivised to find the most efficient bids - so the merchants effective CPA will be higher than if they let a CPA affiliate aquire the traffic for them. If the merchant does incentivise the sales made then they have ended up at CPA affiliate marketing again.