Despite the big number affiliate marketing still has lots of convincing to do
A rather infamous interview with ASOS co-founder Nick Robertson dating back to 2007, referred to some of its early affiliate partners as “grubby little people… growing their income at our expense” that demanded “silly commissions”.
This perfectly sums up the historic battle for mindshare faced by the affiliate or online performance (OPM) marketing sector.
To further its rehabilitation in the eyes of brand-side marketers (its initial attempt to rebrand ‘affiliate’ as OPM) was this week’s debut IAB study to assess its contribution to the wider UK digital economy.
In its study, it found that OPM generated £8bn in sales in 2012 - on the back of £814m being spent in the sector - constituting nearly 5-6 per cent of all UK e-commerce retail sales.
Massive numbers, I’m sure you’d agree, especially when you think that OPM essentially doesn’t charge brands up front for a sale or a sales lead. In the face of such ‘overwhelming’ evidence, it begs the question: ‘Why aren’t brands investing more on OPM?’
Affiliate marketing veteran and current senior online marketing manager at Sky, Helen Southgate told me despite evidence pointing to handsome returns of using OPM, a lack of education in the industry still reigned.
Although education was improving among mainstream marketers, the fact affiliate networks involve a very complex structure often intimidates the uninitiated rendering them unwilling to spend more on such modes of customer acquisition.
Hence, this lack of education is stifling investment in the discipline from those who make the decisions and ultimately have to defend how their media budgets are spent.
To address this situation, we can expect the parties involved in producing this study to launch a major charm offensive this year but what’s clear is that they’ll have to address the allegations of ‘stealing traffic’ and skimming links’ if they are to get more than just a foot in the door.