UK Affiliate Census 2009

UK Affiliate Census 2009 In association with Affiliate Window http://econsultancy.com/reports/affiliate-census Linus Gregoriadis Research Director Econsultancy.com Email: [email_address] Website: http://econsultancy.com

Overview UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Methodology

Findings

Affiliate businesses

Networks

Merchants

Communication and resources

Questions

Methodology

Online survey in January 2009

Two years after the inaugural affiliate census

Promoted by all leading networks to members

Over 1,000 respondents

34% full-time

46% part-time

20% hobbyists

All respondents UK based

UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

| 13 January 2008 | Course Title | Affiliate businesses

Revenues generated from affiliate businesses

A third of affiliates (31%) earn less than £50 per month.

13% earn more than £50,000 per month (for merchants)

True content (36%) and PPC (20%) top-rated categories.

PPC more important for full-time.

Text links ( 35%) and banners (26%) top-rated linking methods.

Banners more important for part-time.

Ranking of affiliate categories and linking methods UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Voucher-code / cashback sites

Seen as a threat by 43% of affiliates.

Could increase awareness about the sector.

UK Affiliate Census | http://econsultancy.com/reports/affiliate-census “ They will educate and reassure the public masses about various sectors (cash-back, bingo, discounts), opening up a much larger customer base for us all.” “ Voucher code and incentive-based sites are going to destroy affiliate marketing for normal people and small businesses completely if the systems that are currently allowed for them remain unchecked.” “ Cash-back incentives don't stop people from searching for a still better deal, or reviews before they buy. Not necessarily a threat - depends on how you present the merchant to buyers, and what niche you're in for competitor reasons.” “ These will of course damage existing content sites as more people are aware of cash-back models.”

Last click wins rewards model UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

| 13 January 2008 | Course Title | Networks

Ranking of different networks UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Percentage of affiliates ranking #1 network

43% 18% 10% 9% 8% 5% 2% 2%

Most important criteria for selecting a network UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Range of advertisers and tracking reliability deemed most important

Role of networks

Includes both positive and negative sentiment

Failure to take responsibility for dubious affiliates.

Lack of good support from some networks.

Need for more transparency.

Appreciation of networks and satisfaction.

Delivery of a professional service and tech support.

Saves on time and effort.

Recognised/established networks can be trusted.

Can help increase revenue streams.

“ They still have a long way to go in terms of providing a high quality, professional service.” “ I think networks are a fantastic idea…It cuts out all the hassle of dealing with individual advertisers and it saves the bother of joining dozens of individual affiliate programmes...” UK Affiliate Census | http://econsultancy.com/reports/affiliate-census “ There is a need [for] more transparency about how merchants are ‘policed’, to ensure valid sales are logged.” “ I would prefer quicker responses to request for assistance with technical issues, and would prefer to discuss issues and solutions over the phone, rather than via email.” “ There appears to be a lack of training to affiliate managers (on both a network and merchant level) in understanding an affiliate.” “ Trust is an important issue, when it comes to networks.” “ As affiliate marketing moves from an unregulated profession to a reputable marketing channel, networks will be relied upon to clamp down upon the ‘cowboys’ within the industry.” “ They need to be more aggressive in policing bad affiliates, even if it costs them income.”

| 13 January 2008 | Course Title | Merchants and sectors

Most widely promoted sectors UK Affiliate Census | http://econsultancy.com/reports/affiliate-census Travel / flights: 33% Electrical goods: 29% Gifts / gadgets: 28% Fashion / Clothes / lingerie / accessories: (27%) Entertainment / music: 26% Computers / laptops / peripherals: (25%) Home / Gardening: 23% Books: 22%

Biggest climbers since 2007 UK Affiliate Census | http://econsultancy.com/reports/affiliate-census % Change Home / Gardening (+ 8%) Gifts / Gadgets (+ 6%) Electrical goods (+ 5%) Health / Sport / Fitness (+ 5%) Computer games and consoles (+ 5%)

Reasons for not promoting a merchant UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Reasons for dropping a merchant UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Demonstrating loyalty to affiliates

Honesty

Flexibility

Better communication

“ Open communication is good. [It is important] to work as a team. After all, both the affiliate and the merchant have a common goal – sales.” “ Be willing to look at alternative ways of promoting the company, beside the traditional methods.” “ Why should a merchant show loyalty? I have no loyalty; if another merchant pays me, then I will redirect traffic there. I don’t expect loyalty, as I can’t reciprocate.” “ Better communication, fair incentives, maximum notice when terms change.” UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Reasons for working with merchants directly UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Reasons for not working with merchants directly UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Direct relationships: time-consuming

| 13 January 2008 | Course Title | Communication and resources

Ranking of different sources of information UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Level of communication with merchants UK Affiliate Census | http://econsultancy.com/reports/affiliate-census

Opportunities and threats UK Affiliate Census | http://econsultancy.com/reports/affiliate-census Opportunity Threat

Mobile internet 55% 10%

Recession 55% 30%

Google 30% 44%

Super-affiliates 22% 36%

Voucher-code sites 20% 43%

How to revolutionise the industry

Enforcing stricter rules for voucher code sites.

Skills and training.

Better tracking to ensure fair commissions.

Communication and transparency.

Competition to prevent over-saturation in the industry.

UK Affiliate Census | http://econsultancy.com/reports/affiliate-census “ Consolidate the number of networks and agencies. Hopefully, the forthcoming recession will bring this about.” “ Decent analytics for merchants to see the sales process and the ways the affiliate sectors influence it. i.e. late stage addition of voucher code or cash-back affiliate. They will then see the true benefit of content vs. non content affiliates.” “ Technological advances in tracking and monetising links from social networking sites and blogs in unobtrusive formats.” “ Training merchants to understand online marketing.”

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