Interactive Seven 2009 Supplement - Marketing Week

MWIB_260209_p017 19/2/09 18:30 Page 17
INTERACTIVE AFFILIATE
CPA model
is a source
of optimism
Affiliate marketing is in for a
rocky ride – there’s just no getting
around the impact that a
dip in consumer spending will
have on advertisers. But, just as
necessity is the mother of
invention, so a recession
should drive, not hinder,
advances in the sector.
In general, if digital is the
most recession-proof marketing
channel thanks to its
accountability, then affiliate
marketing – given its focus on
the cost-per-action (CPA) model
– should be the most recessionproof
digital channel. The dominance of CPA in the affiliate sector
also suggests a more fundamental reason why affiliates will continue
to thrive: since they only get paid when they help make a sale, they are
the first to shift their strategy and tactics when circumstances change.
Still, the broad theme of affiliate marketing in the future is the
same whatever the economic state of affairs – to reward publishers on
a performance basis. Moreover, there are areas where affiliate marketing
will continue to evolve in 2009, as it has in the past, and each is
as much a response to the need to improve constantly in a fiercely
competitive space as it is a response to the financial crisis.
First, we expect the broadening of affiliates’ skills to continue.
They tend to be of two types – pay-per-click affiliates that focus on
search advertising to drive traffic and content affiliates that build
sites and services to add value to the consumer pathway along the
road to the merchant site. Increasingly, affiliates are becoming proficient
in any activity that helps deliver converting visitors for their
clients. That trend will continue and the best affiliates are becoming,
essentially, digital agencies focused on the CPA payment model and
able to employ all and any method to help make sales.
Second, the emerging dominance of cashback offers and reward
sites will go on. As consumer spending gets tight, such offers will
become even more crucial to secure a sale – so much so that merchants
will need to provide them to attract sales.
Last, advertisers will be focused on driving efficiency and the best
return on their advertising investment from whatever money they do
spend this year so advanced reporting will be vital. Enhanced reporting
will allow informed decision-making by merchants on the “best”
channel and give a better understanding of the path to conversion to
more effectively manage de-duplication so that the right channel or
affiliate can be attributed with the right sale.
At Webgains, we look forward to the challenges that lie ahead.
.
Robert Glasgow, Webgains UK, Dragon Court, 27-29 Macklin
Street, London WC2B 5LX. T: 020 7269 1230,
W: www.webgains.com
Dawn of a
golden era
As one of the few sectors not to be
affected by the economic downturn,
affiliate marketers can look forward
to a period of consolidation and
growth. By Archana Venkatraman
The current economic crisis will mark a consolidation of affiliate
marketing. This is because the online channel remains
upbeat, transparent and offers better value than offline channels.
As a result, affiliate marketing will be high on the radar
of marketers in 2009 as they look for strategies to overcome this recession
by generating more sales via ecommerce.
Marketers now consider affiliate marketing to be the focal point of
their overall online marketing strategy because the sector is proving
popular with both customers and clients. Indeed, corporates are turning
to affiliate marketing for two primary reasons – its risk-free nature
and its tangible, cost-effective return on investment (ROI). In a similar
fashion, cash-strapped consumers are also turning to affiliates
because they want more web discounts.
Mark Kuhillow, managing director of affiliate management agency
R.O.EYE, says: “The onset of recession has not yet dented the confidence
of online consumers. Cashback and voucher-code sites have
been the main beneficiaries of these difficult times.”
As clients insist on cost-effective campaigns, marketers embrace
affiliates for its cost-per-action
(CPA) model instead of traditional
advertising or other digital
techniques.
Affiliate marketing promotes
products or services online
through a network of websites
that advertises and endorses these
products using email, graphical
advertisements or even a blog.
Affiliate sites involve merchants
(advertisers) as well as affiliate
networks. It was developed
from internet marketing where the
advertisement publisher gets
remunerated for every purchaser
or sale supplied by them.
Recently, the sector has seen a
growth in the use of video as a
David Hall: Expects to see the promotional vehicle. About 48%
cost-per-action model become a of internet users visited videosharing
sites such as YouTube multiple attribution system
Marketing Week Interactive 17