All clouds they say have a silver lining, and, if this is true, the affiliate-marketing industry’s unexpected twist of luck has been the recession. Since the start of the credit crunch the sector has become more dynamic with a very healthy UK value of £3.82 billion in 2008 marking a 22 per cent increase from the £3.13bn the previous year.

So, what has triggered this positive surge for the sector? Basically, the recession has forced advertisers to scrutinize and squeeze budgets and consumers are looking for a deal more vigorously than before, which all contributes to 2009 being the most eventful and successful year the industry has experienced.

In fact the huge rise in popularity of voucher codes and cashback sites amongst consumers has caught the attention of advertisers vying for customer sales. Where people used to feel embarrassed handing over a dog-chewed voucher at the checkout, as if they might not have enough money to pay full price, today’s savvy online shoppers are increasingly basing their purchase decisions on whether a voucher code is available or not. They are so easy to get hold of, you now feel stupid if you haven’t got one.

It is all about the perception you are getting a good deal.

However, the activity has created a confusing number of consumer jumping-off points used to buy products on the internet. Online retailing has now become a jungle in which marketers must keep a close eye over their products or risk losing control of sales to the profusion of voucher, price-comparison and cashback sites influencing the online journey.

Research shows that a growing number of consumers end up at the retailers web site only after considerable research on google or price comparison sites. An estimated fifth of online sales are made after consumers click into a retailer's site from a price-comparison site, or via websites and blogs offering editorial comments and product reviews, or from money-off voucher code sites.

By paying commission to affiliates that send shoppers to their own websites, retailers can lure customers in from across the web. An estimated £227m was paid in commissions and fees to affiliates and networks last year. Consumer awareness of affiliate channels is increasing, and the use of cashback sites is an excellent example of an industry innovating and responding to market changes.

Some businesses offering a voucher code box on their website worry that they are giving away discounts they don’t need to.

Are they simply prompting people on the point of purchase to go off and search for a voucher code? Or are they reinforcing the purchase decision and avoiding the temptation for customers to visit a competitor’s site in a search for one that does offer discount?

Companies need to find a comfortable middle ground: one where they are not out of pocket by offering money-off vouchers on top of paying an affiliate commission for each sale, but not missing out on sales either. Here are a few options for those wanting to take advantage of the voucher code frenzy:

1) Work out how much you can afford to give as a discount – say 5, 10 or 20% off. Then split this between the affiliate and the consumer. If you can afford to give 20% off, give 10% off to the consumer and 10% commission to the affiliate who has driven the sale. (With this model, the affiliate gets less commission than the consumer gets discount as they are only paid commission on the final sale amount)

2) Offer affiliates the opportunity to earn more commission when a voucher code is not used

3) If you can’t offer the same discount across all products, look at the margins you make on different products and set commissions and voucher code values accordingly

Choose the right approach for your business and you can ensure you and your affiliates are not out of pocket, keep your customers happy with their bargain, and make them more likely to tell all their friends about you too!

If you’d like help and advice on the right affiliate strategy for your business, please contact Anna Jackson, Digital Media consultant at True.

True is a full service digital marketing agency founded in 2004. For more news see: www.truedigital.co.uk <http://www.truedigital.co.uk/&gt;

Published on: 3:18PM on 4th January 2010