Affiliate Marketing: Amateurs’ dramatic change
AOL being shown the door when it made an offer on TradeDoubler is a good indicator that things are going well for an industry that was once criticised for being like the Wild West. Affiliate marketing is on the map and most major brands are experiencing its benefits. By David Hall
CV
David Hall
Affiliate Window Communications director
2005 Affiliate Window
2005 Quantum Publishing
2002 Crimson Publishing
2000 UpMyStreet.com
1996 Reed Business Information
What happened to affiliate marketing in 2007? It seems fair to observe that the industry has taken a significant step forward in the past 12 months, a step that started with the rejection of AOL’s bid to buy TradeDoubler, the Swedish listed affiliate network. It sent a message to the market that the people involved in and investing in affiliate marketing could already see the long-term value of the industry, and that the future was far rosier than the amount these newcomers were hoping to pay to get in on the act.
Confidence boost
Another development was the move by the previously UK-centric network BuyAt to launch in the US. The strategy shows the level of confidence that operators in the UK have in their approach and in the market. This is a fine example of a company from over here that’s hoping to do rather well over there (to borrow from Hanson’s slogan).
People in the industry have a greater level of understanding of how to apply affiliate marketing principles among online marketers than ever before. This development has been fuelled by so many new professionals coming into the affiliate industry in 2006 and 2007. These people have then gone on to share their knowledge, experiences and ideas on forums and at events, with business associates and colleagues.
The affiliate networks’ response to this burst of new knowledge has been to launch innovative technologies, improve upon their accountmanagement services and deliver new affiliate-merchant partnerships. Affiliate Window, for instance, has introduced ShopWindow, a comparison tool that has been made available to affiliates so they can dismantle and rebuild the API to query the database of over 3.5 million products and return the data to be displayed in any way they choose. Innovations like this have enabled companies such as News International – a traditional publisher with millions of online users, but no history in affiliate marketing – to get in on the act quickly and easily.
Not so long ago there was the sense that affiliate marketing was just one step away from the “Wild West”. This made established brands feel wary about getting involved in the industry. In 2007 that fear is a very distant memory. The majority of the UK’s high street retailers are set up with an established and successful affiliate marketing strategy.
Recognition
In turn, affiliates, which might once have been seen as the epitome of Andrew Keen’s “Cult of the Amateur”, are being recognised by networks and merchants as businesses with their own brand, competitive challenges and sense of responsibility over how they represent companies they choose to work with.
The testimonies from businesses (see box) show the important role affiliate marketing is now playing, and how far things have developed over the past year.
How Woolworths runs its affiliate marketing programme
I never ask my affiliate network for something unless I can provide support from my end. Last year we did well through our affiliates, but there is plenty of room to improve the channel.
We run our own pay-per-click campaign and limit our PPC affiliate activity to just one affiliate relationship. This has created a close partnership that complements, rather than competes with us.
A second group of affiliates has been given a discount code for a specific set of products, helping the business to sell stock before the end of the season. Looking ahead, we will be implementing a shortand long-term affiliate strategy, learning lessons from this year. For example, the warm summer weather came early this year and we had to act quickly, so that seasonal products were available to our affiliates.
In 2008 our affiliates will expect us to have promotions ready and waiting for them. If we can react even faster, we will all get more business.
Mark Batty, online marketing manager, Woolworths
Why we are engaged in affiliate marketing activities
Affiliate marketing was an obvious step for us. It ties in with our marketing efforts to reach a wider audience outside of the “cycle-enthusiast” segment of the market.
The affiliate channel helps us get Evans Cycles to a much wider audience on a range of sites, most of which are not cycling specific. We had 300 affiliates in six months, with five of these doing 85% of our transactions. In the first quarter of this year we had over £100,000 worth of business through the affiliate network.
Ben Hart (pictured), marketing manager, Evans Cycles
The skills of affiliates and affiliate networks
I Want One of Those has looked at and tried most combinations in engaging affiliate marketing; in house, outsourced, back in house, half and half.
Nothing has so far worked as well as having a professional affiliate manager delivering the best service, brand-term policing and excellent reporting.
If you employ an affiliate manager in house, you are exposed if they leave. The advantage of working with a network is that you have access to a succession of professional account managers who not only really understand affiliate marketing, but also your business and the affiliate market.
Affiliates are centres of external expertise and innovation. They understand the dynamics of search, which is unattainable in house unless your business is a highly resourced multinational corporation.
Not only that, but their skills are at the edge of clever computing, they constantly refresh their approach and, as it’s their money they are risking, they tend to get it right or leave the industry.
Richard Wainright-Lee, managing director, IWantOneOfThose.com
