Affiliate marketing has become a crucial area of business for many digital agencies, with 85 per cent of agencies saying that they now manage more affiliate marketing for clients than they did two years ago, according to research by E-consultancy and the UK’s largest independent affiliate network, buy.at.

On average, this channel now represents 20 per cent of turnover for those agencies surveyed. The overwhelming majority of respondents (92 per cent) say their agencies will be managing more affiliate marketing in two years’ time, further highlighting the growth of this sector.

Some 90 per cent of respondents believe that affiliate marketing is a way of growing their agency or differentiating it (either ‘definitely’, 39 per cent, or ‘somewhat’, 51 per cent) with only 9 per cent disagreeing.

Almost 100 UK agency respondents took part in the E-consultancy / buy.at Affiliate Marketing Survey carried out in August and September 2007.

Kevin Cornils, CEO of buy.at, comments, ‘Buy.at has developed a proactive partnership approach with digital agencies. From the very beginning we realised that by combining the strategic insight and media planning approach of agencies with the specific expertise, technology and account management of our network we could provide the best affiliate marketing to agency clients.’

Linus Gregoriadis, Head of Research at E-consultancy, adds, ‘Affiliate marketing is becoming an important battleground for media agencies because of the appeal of its performance-based model. The channel is proven to deliver customers or sign-ups in a cost effective manner. This research shows the extent to which agencies are integrating this type of marketing into their service offering.’

Affiliate Marketing is rated by agencies as the most cost-effective channel for customer acquisition, with 61 per cent saying that it is ‘very cost effective’ and 36 per cent saying that it is ‘quite cost effective’.

The next most cost-effective channel is deemed to be paid search, which is described as very cost effective by 59 per cent of agencies and quite cost effective by 36 per cent. The affiliate marketing channel is the second best channel for ‘driving volume’ for their clients after paid search, according to agencies surveyed.

Despite the success that many agencies are achieving for brands across a range of sectors, there are still significant issues affecting this type of digital marketing which stand in the way of further industry growth.

More than half of agency respondents (57 per cent) say that they ‘wish they could get more out of this channel’ compared to just a third (35 per cent) who declare themselves satisfied.

Agencies rate the biggest barrier to success in this channel to be ‘a poorly converting website’, which is regarded as either a ‘major’ or ‘minor’ barrier by 66 per cent of respondents.

‘Restricted budget’ is also rated as a significant barrier, with 52 per cent saying it is a major or minor barrier. Additionally, half of respondents say that investment is held back because clients ‘don’t know the level of incremental volume they will get’.

Lack of internal resource is cited as a major or minor barrier by half of agency respondents (49 per cent). However, the good news for the industry is that three-quarters of respondents (76 per cent) expect to have more people managing affiliate marketing in two years’ time.

Full details of the Affiliate Marketing Agency Survey report are available from www.buy.at or to E-consultancy subscribers, or on a pay-per-view basis, at:

http://www.e-consultancy.com/publications/affiliate-marketing-agency-report-2007/

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Research methodology
In September 2007, E-consultancy analysed over 700 responses to its research request, which was emailed to its database. Of these 96 were UK agencies.
About E-consultancy
E-consultancy is an online publisher of best practice internet marketing reports, research and how-to guides. E-consultancy, named Publisher of the Year at the 2006 AOP Awards, also publishes buyer’s guides and has a directory of 100,000+ third party internet marketing white papers.

Subscribers pay from £195 per year to access the exclusive and highly practical content. E-consultancy has more than 100 events lined up for 2007, including roundtables and monthly Supplier Showcases, where six suppliers pitch to an audience of pre-qualified buyers at a Central London venue.

E-consultancy has 58,000 registered users and more than 145,000 unique user sessions per month (audited by ABC Electronic). It is popular among internet professionals because of its time-saving advice and insight. The company also provides a range of public and in-house training programs, such as seminars and workshops.

If you would like to know more about our training options then please visit our website or contact Craig Hanna on +44 207 681 4078 or email him at Craig@e-consultancy.com.

http://www.e-consultancy.com/about/

About buy.at

Established in 2002, buy.at is the UK’s largest independent affiliate marketing network. buy.at drives online sales growth for 250 of the biggest brands across all sectors through its leading network of 9,000 good quality affiliates, supported by industry leading commercial and technical innovations. A pioneer of the open network, buy.at encourages merchants (advertisers) and affiliates (publishers) to communicate directly, to ensure the success of affiliate programmes. Clients include AA, Butlins, Carphone Warehouse, Capital One, Egg, John Lewis, M&S, Powergen, T-Mobile and Virgin Media.

buy.at has experienced 250% growth in turnover year-on-year since 2004. In March 2006, buy.at secured its future growth following a £7.3 million investment from Esprit Capital Partners. Bruce McLaren, renowned for leading Advertising.com as International CEO to a successful sale to AOL Time Warner, was appointed Chairman. Former match.com MD Kevin Cornils was recruited as CEO. In September 2007, buy.at was revealed as the UK’s ninth fastest growing technology company in the Sunday Times TechTrack.

Published on: 12:00AM on 14th November 2007