How Affiliate Marketing Looks In February 2010

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An insight into Affiliate Marketing in 2010, how advertisers assess the value it brings, the key metrics for performance and a comparison to paid search marketing as a channel.

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How Affiliate Marketing Looks In February 2010

  1. 1. Presentation to Google UK How Affiliate Marketing Looks in February 2010<br />Sri Sharma Managing Director<br />1st February 2010<br />
  2. 2. 1Key Stats on Affiliate Marketing <br />01<br />
  3. 3. The UK affiliate market was worth £3.82bn in 2008,<br />22% growth in 2008 and projected to cross £4bn 2009. <br />Source: Econsultancy, Nov 2009<br />02<br />
  4. 4. The UK market for Search Engine Marketing was worth £2.42bn in 2008, 23% growth in 2008, projected to grow by 12% in 2009. <br />Source: Econsultancy, Nov 2009<br />Paid Search forms 59.3% of all online advertising in the UK. <br />Source: IAB UK, Apr 2009<br />03<br />
  5. 5. 2Affiliate Marketing –- How it works<br />04<br />
  6. 6. Where a third party advertises products or services on behalf of a retailer in return for an agreed commission for a sale or lead.<br />05<br />
  7. 7. Term covers the whole industry:<br />Affiliate <br />Publisher<br />Affiliate<br />Network <br />Merchant<br />Agency<br />06<br />
  8. 8. 34% full time, 46% part time, 20% hobbyists<br />18% female, the rest male<br />Source: Econsultancy, Nov 2009<br />07<br />
  9. 9. 80/20 is actually 99/1<br />08<br />
  10. 10. 3Affiliate Marketing Mix<br />09<br />
  11. 11. True content (SEO) 36%<br />Paid Search (PPC) 20%<br /> Price comparison 11% <br /> Blogs and forums 8% <br /> Cash-back and reward 5%<br /> Email marketing 5% <br /> Voucher codes 5% <br /> Shopping directories 4% <br /> Social networking 3% <br />Corporate intranet 2% <br />Source: Econsultancy, Nov 2009<br />10<br />
  12. 12. 4Key Metrics for the Client in Affiliate Marketing <br />11<br />
  13. 13. Typically Direct Response Goals<br /> Target marketing Cost per sale<br /> Contribution to profit of each incremental sale<br /> Revenue generated per £1 spend<br /> Cost per acquisition - paid to the affiliate (CPA)<br /> Conversion Rate<br /> Earning per Click (EPC)<br />12<br />
  14. 14. 5The Client Perspective – Why an Affiliate Marketing Strategy? <br />13<br />
  15. 15. Drive revenue<br />Expand reach with limited budget<br />Low financial risk<br />Easy to measure<br />Improve brand visibility and awareness<br />Influence other marketing activities<br />Complement other marketing activities<br />Board directors increasingly get it<br />Increasingly accepted part of the marketing mix<br />14<br />
  16. 16. 6Affiliate Marketing Strategy Examples <br />15<br />
  17. 17. ContentSEO<br />16<br />
  18. 18. Rise ofVoucher Codes<br />17<br />
  19. 19. SocialNetworking<br />18<br />
  20. 20. PPC<br />19<br />
  21. 21. Thank you<br />Do you have any questions?<br />E: sri@netmediaplanet.com<br />T: +44 (0) 203 008 8321<br />Tweet me: @srisharma<br />www.netmediaplanet.com<br />2009<br />20<br />

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