Outlook for UK industry positive despite impending VAT increase

London: Affiliate network, LinkShare, today releases results from its latest piece of research* exploring what companies are expecting from their online marketing activity in the run up to Christmas and during the New Year. Over two thirds of respondents (68%) believe 2011 will bring an increase in digital marketing budgets - this is despite the impending rise in VAT. In addition, over half of professionals surveyed (53%) anticipated that the VAT increase will have either little or no impact on consumer spending, with just 10% stating it would lead to a decrease in marketing budgets next year.

Commenting on the findings, Liane Dietrich, MD, LinkShare says “Overall, the results were encouraging for marketers, revealing confidence in the performance of the digital industry in a time of continued economic uncertainty”.

The impact of VAT
Responses were mixed when it comes to speculation over what the impact of the VAT rise on the industry would be. 30% expect to see a bigger focus on targeted campaigns compared to mass marketing techniques, with a fifth of companies planning to streamline their processes to increase efficiency and 18% anticipating 2011 will encourage a greater emphasis on measurement and ROI. Demonstrating confidence in the industry’s performance, only 18% thought their budgets would be cut as a result of limited resources and just 7% predicted a lack of funds would cause their company’s creativity to be stunted.

The rise of video advertising
When asked what was expected to be the most influential online marketing format in 2011, the results covered a wide range, demonstrating the increased importance marketers now place in incorporating a variety of tools and tactics into their campaigns. Almost a third (30%) believed video advertising would be the most widely used digital format and this was closely followed by ads on personal social networks (28%). Vouchers, promotions or special offers received 17% of the vote, interactive ad banners 7%, sponsored search engine links 6% and traditional banner ads and ads on professional social networks each obtained a 2% share.

Christmas campaigns
Looking at the planning of online marketing activities during the run up to Christmas, the research found marketers will be using social media and vouchers to help encourage spending. Moreover, 43% of marketers believe social media orientated campaigns will be most widely used by marketers, followed by online vouchers and offers (37%) and adverts contained in online video (17%). Despite the recent hype surrounding the growth of augmented reality, it appears this area is yet to make breakthrough into marketing campaigns as only 2% of respondents plan to incorporate it into their seasonal sales strategies.

“The research is good news for the industry as we head closer to the rise in VAT and it’s definitely a positive sign that marketers are recognising the need to spread their reach far and wide by preparing to invest more heavily in their digital strategies” comments Liane Dietrich. “A call for more targeted and measured campaigns is certainly in line with what we are seeing from our own customers who are looking to increase their efficiency and after the Christmas sales boom this will remain important. Affiliate marketing provides a good opportunity for those wishing to adopt this approach, as it is a targeted online marketing tool which can be closely monitored and tailored for the client to maximise ROI.”
About the research
* LinkShare surveyed 80 marketing professionals during the Advertising and technology (ad:tech) exhibition in London on 23rd September 2010.

About LinkShare UK
LinkShare is the world's largest affiliate network with over a decade of affiliate marketing experience. LinkShare's client service is unique to the UK market and our UK partners are able to benefit from our global affiliate relationships, leading advertiser and publisher tools and the international experience the UK team offers.

Since launching in the UK in 2006 LinkShare has partnered with some of the UK’s leading brands such as AVON, Coast, Elemis, French Connection, Hamleys, House of Fraser, John Lewis, Kurt Geiger, LEGO, Oasis, Radisson Edwardian, Speedo, T.M.Lewin, Topman, The White Company and UNIQLO.

Well-respected by both advertisers and publishers, LinkShare provide access to a unique network of quality publishers, alongside market-leading tools to maximise ROI. Superior service combined with technology innovation allows advertisers and publishers to acquire and retain new customers, increase revenue and drive results. Uniquely in the affiliate market, LinkShare’s patented tracking technology has never relied on pixels or cookies to track transactions.

LinkShare was founded in 1996 and is headquartered in New York City, with offices in San Francisco, Chicago, London and Tokyo. LinkShare is a division of Rakuten, Inc.

Blog – blog.linkshare.co.uk
Twitter – LinkShareUkBlog

Press Contacts
Chloe Wilkinson
Senior programme executive – Hotwire PR
020 7608 2500

Published on: 9:35AM on 7th October 2010