Affiliate marketing, which was recently hailed as an online marketing revolution, is not the be-all and end-all.
Affiliate marketing programmes allow websites with a common interest to join an affiliate and gain commission from selling the other affiliate websites’ goods or services. However there are a number of negative aspects to these programmes.
Affiliate members are often smaller websites which link with well-established brands to add value for their users. The danger is that their users will buy once through the affiliate but then go direct to the brand for their next purchase, cutting out the site’s opportunity to earn commission. There is also a geographic problem. Visitors to affiliate sites may not live in the same country as the distributor.
Membership of affiliates are limited in that members must have a website to participate, and the programme does not translate to offline marketing campaigns. Another drawback is the lack of a catchy address to advertise offline, since when visitors click through to make a purchase, the address in the browser is usually lengthy and certainly not branded. A short, memorable domain name would enable merchants to extend their reach to offline consumers, and in doing so the programme would target rational as well as impulse buyers. Online the address could be used on a link or banner ad, and offline in a direct mail campaign, for example, to send customers to the merchant. This would also enable detailed tracking of which media was attracting most traffic to the site.
The ability to target offline groups would mean that well-established common-interest groups, which primarily communicate offline, could benefit. Charities for example, would be able to offer their members merchandise through their regular mailings and benefit from the commission earned on any sales.
Moreover, the location of Internet users would no longer be a distribution issue.
An obvious extension to affiliate programmes is to offer users discounts to encourage them to buy. Using different catchy addresses, different discount rates could be applied to target different markets. Because of the precise tracking facility, commission would then be on a pay-per-lead rather than a pay-per-click basis, making a precise science of on- or offline referral programmes.
Richard Armitage is chief executive of Internet specialist Rename.