Business benefits of affiliate marketing

Posted 09 July 2007 12:03pm by Graham Charlton with 4 comments

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Affiliate marketing complements and sometimes replaces other types of online and offline marketing as an important channel to market. Last year, affiliates generated around £2.16bn in sales for UK-based merchants.

Companies can derive many benefits from an investment in affiliate marketing. Let’s take a look at a few…

• Cost-effective Customer Acquisition
  There is no payment to affiliates unless they refer a visitor who subsequently becomes a customer. As such, there is no wasted budget in affiliate marketing.
• Fixed Costs
  The bounty paid to affiliates is cost of sale. You set the bounty, and you pay when sales are made. There aren’t any variables beyond that (unless you choose to pay different levels of commission as sales increase). Merchants need to pay network fees, which differ (see our Affiliate Marketing Buyer’s Guide for more details), but otherwise affiliate marketing fees are a steady cost of sale.
• Brand Visibility
  Affiliates can secure high search engine listings and / or display your ads on their website. This is all free brand exposure and a nice side benefit of affiliate marketing.
• Customer Acquisition - Targeted Prospects
  Affiliates choose the ads they wish to place on their websites. They know their audience and will pick the campaigns most suited to their demographic. As such, the ads are targeted by humans. It is in the affiliate’s interests to pick the ads that their audience is likely to respond to.
• Outsourced marketing team/s
  Many affiliates are experts in search engine marketing, providing you with a way of potentially getting to the top of Google without needing to spend a fortune on SEO or PPC.
• Find-ability
  With the above point in mind, if a consumer visits Google and multiple listings ultimately link to you, then you’re going to have a much better chance of being found than competitors with only one or two (or no) links on the first page.
• Transparency
  A key appeal for merchants is the transparency of return on investment, through the ability to track the origin of sales. You can see exactly where and when sales are made. 

For more, see our Affiliate Marketing Business Case , which outlines the benefits of an investment in affiliate marketing.