Poor communication and a widespread lack of market understanding result in considerable sales and profit margin losses across the affiliate industry, new research reveals today. The study, carried out by R.O.EYE, the UK’s first and biggest affiliate management agency, also shows that more than a third of ‘super-affiliates’ surveyed could be working directly with merchants within 12 months.

This first ever study of a cross-section of the top 20 super-affiliates - companies responsible for 80% of sales volume across the affiliate marketing industry – identifies the need for affiliate programmes to be managed by merchants and affiliate networks on a more strategic basis.

The survey finds that super-affiliates believe the root of these problems to be ineffective affiliate programme management. Common issues such as dead or old data feeds and expired offers frequently result in reduced commission for affiliates and loss of sales for brands. Investment into skilled resource to manage and compliment merchants and affiliate networks, however, would entail considerable benefits.

Mark Kuhillow, managing director of R.O.EYE explains, “Affiliate marketing passed the £2 billion threshold in 2006 and is now a serious element of a company’s marketing activity. The resources dedicated to its day-to-day management must reflect this.”

Kuhillow adds, “Mismanagement of affiliate marketing risks not only drops in revenue, but also potential negative impact on a brand’s integrity online.”

The majority of ‘super-affiliates’ involved in the study are revealed to have direct relationships and communication with merchants already in place, and more than a third are considering working exclusively with merchants over the next few months.

The survey unearths that by cutting out the middle-man, information transfer becomes a far smoother process with less room for error or miscommunication. However, it is also acknowledged that working directly with a merchant can be very time consuming, especially if the merchant is new or inexperienced in affiliate marketing.

The third key finding is the need for increasingly strategy-based affiliate programmes. By establishing understanding of all parties’ goals at the outset and developing longer-term plans around these, super-affiliates believe much more can be done by brands to maximise return.

“Affiliate marketing is typically implemented on a tactical basis,” says Mark Kuhillow. “A more strategic approach would enable greater return for both brands and affiliates, but also allow affiliate marketing to be far more integrated as part of the marketing mix.”

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Editors notes

About R.O.EYE

R.O.EYE provide specialist marketing services to e-commerce merchants. Delivering fast and tangible results, R.O.EYE is the largest specialist affiliate marketing agency in the UK.

Well respected and firmly established within the affiliate community, R.O.EYE boasts unrivalled market expertise. The company is independently owned and funded and has the flexibility and resource to assist clients in the development of in house super affiliate programmes.

R.O.EYE provides clients with tracking solutions, analysis and commentary to ensure accurate forecasting of budget and volume, and performance management.

Clients include: PC World Business, Alliance & Leicester Commercial Bank, Freedom Finance, ManKind, Subaru, Welcome Finance.

http://www.ro-eye.co.uk

Contact:

Angela Graham
immediate future
0845 408 2031
angela.graham@immediatefuture.co.uk

Published on: 12:00AM on 2nd August 2007