According to E consultancy s Affiliate Marketing Survey 2008, [ http://www.e consultancy.com/publications/affiliate marketing networks buyers guide 2008/ ] 46 per cent of retailers in the UK believe that affiliate marketing is a very cost effective way for them to promote their products.
While the figure represented a two per cent increase on last year, it was also found that the amount spent on the channel has fallen by four per cent. Linus Gregoriadis, head of research for E consultancy, said: The good news for affiliate marketing is that merchants continue to regard it as a cost effective channel for driving customer acquisition.
So, what is affiliate marketing and can it work for you?
Affiliate marketing is a pay by results programme and has two or three players involved.
The results used for affiliate marketing vary payment could be made on the number of clicks, registrations, leads or sales. It may even be paid on combinations of these or the lifetime value of a customer. It might be a one time payment or a recurring commission and it may even be single tier or multi tier (where affiliates have sub affiliates).
The Internet Advertising Bureau defines six types of affiliate:
Niche content and personal interest websites that cater to a certain niche in the marketplace suchh as sites offering freebies, information on certain hobbies or topics,games and bingo websites, and retail and travel related sites.
Loyalty and reward websites which build a loyal user base by marketing merchants to their users and then sharing their profits with them.
Pay per click (PPC) search affiliates that bid on words and phrases in search engines to help drive traffic to a merchant’s website.
Email marketers who send stand alone email campaigns to their users.
Co registration affiliates who allow users to opt in to receive offers from third party merchants whilst registering on a website, but only with the user’s full approval.
Affiliate networks making merchant offers to their own networks of affiliates while also providing account management and providing email marketing, co registration, PPC and classic affiliate banners and skyscrapers to be run on their affiliate’s websites.
For a merchant, the crucial factors in affiliate marketing are:
For an affiliate probably the most crucial factors are to find a niche market that has:
in demand, high ticket products that are actually selling
has a high income potential
a long term, no overwrite cookie policy to make sure of proper credit for all sales
low cost set up with no joining fees or order processing or customer service issues
a merchant who has a good support programme and account managers
a merchant who pays on time
allows them to ‘make money while they sleep’
Like all marketing programmes, affiliate marketing is no panacea and requires dediaction and hard work from all the parties, but there is plenty of research to show that when it is done properly it has very good ROI for all parties involved.
Richard Hill is a director of E-CRM Solutions and has spent many years in senior direct and interactive marketing roles. E-CRM helps you to grow by getting you more customers that stay with you longer. http://www.e-crm.co.uk/newsletters/e-crm-2008-17-september-newsletter.html
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