Retailers embrace affiliate marketing strategy

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By: Wise Marketer Staff |

Posted on February 26, 2008

The UK's retail industry is increasingly investing in affiliate marketing and many retailers now sees the technique as a cost effective marketing channel, according to research by E-consultancy, sponsored by affiliate network

The survey examined how merchants use and view affiliate marketing techniques, and found that 95% of marketers using the channel consider it to be either "very" or "quite" cost effective.

A viable channel
Affiliate marketing compared well with the 95% of retailers who also felt that paid search techniques are equally cost effective, 88% who found e-mail to be cost effective, and 42% who found display advertising to be cost effective. Only 17% said they found mobile advertising "quite cost effective", while 82% said it was not cost effective.

The study found that retailers in the UK spend an average of 19% of their online marketing budget on the affiliate channel (1% above the all-industries average of 18%). Travel marketers spend 16% on affiliate marketing, while financial services spend an average of 21% on it.

Justifying the costs
Some 44% of the retailers surveyed considered affiliate marketing to be a cost of sale rather than a marketing cost, while a further 42% said it is a marketing cost, and 14% said it was both.

The survey noted that retailers are generally increasing their spending on affiliate marketing, with 62% saying they were spending more on it than two years before. Of those that increased their spending, 27% increased their affiliate marketing budget by up to 25%, while 10% increased it by up to 50%, and 5% increased it by 100% or more.

Return on investment
About 60% of retail marketers reported that affiliate marketing had driven either a "high" or "medium" volume of sales, compared to 33% who saw "high" volumes from e-mail marketing efforts, 14% with display advertising, and only 2% with mobile advertising. Paid search was the most effective technique, however, at 65%.

Barriers to success
The survey also noted some barriers to the success of affiliate marketing campaigns, with 60% of retailers citing "a poorly converting website" as either a major or minor barrier, while 52% cited "difficulty attracting affiliates to the programme", and 44% citing "problems with tracking".

According to Kevin Cornils, CEO for, warned: "The retail industry needs to address issues such as poorly converting websites and tracking online sales effectively, which will help with attracting new affiliates. Retailers also need to improve their communications with affiliates and explain their products and offers more clearly to ensure that affiliates operate effectively as an online sales force."

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