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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.

Graham Charlton

Published 9 July, 2007 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

2565 more posts from this author

Comments (4)

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Mr Bizzi

Graham i totally agree. Affiliate marketing has become a big attraction in the world of online business. It is both rewarding to both affiliates and merchants and is forever growing.

about 9 years ago

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Affiliate marketing guide

In todays world, i think it would be inadvisable for any online business dependent on traffic for profit to ignore affiliate marketing.

Affiliate marketing is a solid solution to getting the word out about your business pretty quickly, especially if you are new to the market and trying to get publicity.

A large number of affiliates have the know how to get your new business noticed

about 9 years ago

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Sam Muller@Computer support in Windsor

I agree for the cost effective part. Treat them just like you would your own sales team, they're worth it! The big advantage is, you don't employ them - with all the associated costs that entails. You don't have to pay them a basic salary or provide a company car or other perks. You just pay them when they provide the results that you want.

about 6 years ago

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Scott@Storage Facility

I know a lot of businesses have tried this before without much success and such stories abound, but this is often because they have used the well known principal of "throw a lot of mud at the wall and hope some of it sticks!".

about 6 years ago

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