Affiliates are driving increasing volumes of sales for merchants in a sector expected to drive more than £5 billion in e-commerce revenue during 2011, according to research released today by Econsultancy and A4u at the a4uExpo conference in London.

A survey of affiliates has found that almost half (48%) of respondents drive at least £5,000 per month (£60,000 per year) for advertisers, compared to only 31% of affiliates who were generating this much revenue in 2009.

More than 300 affiliates took part in the third UK Affiliate Census, conducted by Econsultancy in partnership with the A4u and sponsored by Commission Junction and Argos.

The research shows how the industry has matured and become more professional since similar research was published in 2007 and 2009, with affiliates predominantly positive about the prospects of the industry over the next five years.

More than half of affiliates (57%) say that their commissions have increased in the last year, with a fifth of those affiliates (19%) earning higher commissions reporting more than 100% growth in this type of income over that period.

Affiliates are far more likely to be optimistic about the future of the affiliate marketing industry than they are to be pessimistic. Just under a quarter of respondents (22%) say they are ‘very optimistic’ about the industry’s future over the next five years, and a further 38% say they are ‘quite optimistic’. This compares to 13% who are ‘quite pessimistic’ and only 2% who are ‘very pessimistic’.

Past research has found that poor communication between merchants and affiliates is a problem which has plagued the industry. However, this year’s survey shows that affiliates are significantly more likely to have good communication with their most valuable merchants than in previous years, up from 20% in 2009 to 30% this year.

Econsultancy Research Director Linus Gregoriadis said: “The increased professionalism of the sector is apparent in a number of ways, for example with more full-time affiliate publishers geared up for large-scale operations and the bandwidth to promote large numbers of advertisers. We estimate that the sector will drive more than £5 billion in e-commerce sales for merchants in 2011.”

He added: “There are signs that direct communication between affiliates and merchants is improving. Since the last Affiliate Census two years ago, it’s encouraging to see that merchants seem to be getting the message that they need to communicate properly with their affiliates if they want them to perform.”

Affiliates were also asked about the most significant trends affecting the industry. By some distance, the most significant factor is changes to the Google algorithm, which the majority of affiliates (55%) regard as ‘highly significant’ and a further 31% regard as ‘quite significant’.

The next most significant change for affiliates is the privacy (cookie) law, deemed to be highly significant by 41% of respondents and quite significant by a further 42%.

Chris Johnson, Head of Client Services at A4u (Affiliates4u.com), said: “With affiliates being subjected to two well documented algorithm changes already this year (namely Panda and Panda 2.5) we're fully expecting more testing times to come, paving the way for affiliates to broaden their offering and limit risk by not putting all their eggs in one basket and increasing their marketing efforts to rely less on Google.”

He added: “The outlook is far from doom and gloom within affiliate marketing however, as the introduction of new technologies that broaden an affiliate’s reach across the many facets of Performance Marketing creates new opportunities in Mobile, Display and Social Media that will help many affiliates to spread risk and ultimately transform their web properties into brands. Ensuring their affiliate sites are seen as shopping destinations, as opposed to just web properties, we are sure will be a primary target for affiliates over the coming year.”

Commission Junction UK country manager Florian Gramshammer said: “It’s clear from this research that the affiliate sector is growing; not only are there more sales through this division but it’s becoming an increasingly commercial market with more people establishing full time businesses that rely entirely on the affiliate model.

"This is a very different industry from four, or even two, years ago. Merchants are responding by investing more in the affiliate channel and networks are increasing the support offered to publishers. It’s an exciting sector to be working in at the moment and is only set to grow.”

Other findings from the 2011 UK Affiliate Census:

-) Thirty per cent of affiliates are now sending at least 20,000 visitors a month to merchants’ websites, significantly more than the equivalent figure of 19% two years ago, while the proportion of affiliates promoting at least 80 merchants has increased to 25%, up from 14% in 2007 and 21% in 2009.

-) Almost half of affiliates (46%) surveyed now work full-time in the industry, a large increase from 34% in 2009.

-) ‘Content’ is still the most important affiliate category, despite the rise of other publishers such as voucher-code and cash-back affiliates.

-) More affiliates than in 2009 cite voucher codes or cash-back / reward as the single most important categories, up from 5% to 10% and 5% to 8% respectively. However, a combined percentage of 18% shows that less than a fifth (18%) of affiliates rely primarily on these types of consumer incentives.

-) The two most widely promoted sectors are travel / flights and fashion / accessories, both relevant for a quarter of affiliates surveyed.

-) In 2009, a third of respondents (34%) believed that the last click should hold sway, but this has now increased to 43% of publishers.

-) More than a third of affiliates (36%) say that merchant de-duplication is having a negative impact on their revenue from affiliate marketing.

-) Those who believe there has been a negative impact estimate, on average, that they are losing 29% of their affiliate commissions.

Get this report:

The full report is available on the Econsultancy website to Econsultancy subscribers (Silver membership and above) here:

http://econsultancy.com/reports/affiliate-census

Please contact us if you would like further information.

For more information, contact:
Linus Gregoriadis, Research Director, Econsultancy
linus.gregoriadis AT econsultancy.com

+44 (0) 207 269 1450
+44 7956 564713

About Econsultancy

Econsultancy is a global independent community-based publisher, focused on best practice digital marketing and e-commerce, and used by over 240,000 internet professionals every month.

Our hub has 105,000+ members worldwide from clients, agencies and suppliers alike with over 90% member retention rate. We help our members build their internal capabilities via a combination of research reports and how-to guides, training and development, consultancy, face-to-face conferences, forums and professional networking.

Join Econsultancy today to learn what’s happening in digital marketing – and what works.
Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626(New York).You can also contact us online.

About a4U

Affiliates4u has been providing Performance Marketing insight to over 70,000 members for over 10 years. Currently Affiliates4u is breaking industry news, creating in-depth articles and reports including our recent Performance Marketing Guide 2011 plus our ever popular industry forum with 10+ years of content.

Affiliates4u is part of the A4u brand, within which we create industry events including the a4uexpo Performance Marketing Conferences in London and Europe, plus the annual a4uAwards ceremony and our series of one-day PerformanceIN events focused on the vertical sectors within Performance Marketing. Visit www.affiliates4u.com for more information.

About Commission Junction: Partnerships in Action

We’ve built the world’s largest affiliate marketing company on three words: results, relationships and service.

We believe people and partnerships are as vital as the advanced technology we use. This stellar combination of people and technology helps us deliver amazing results based on wholly measurable brand actions.

Our teams match expertise in shaping highly specific and optimised digital brand strategies with a network of innovative publishers established in the UK and around the globe.

We’re part of ValueClick Inc., a world-leading online marketing company, which means our teams benefit from exposure to constant innovation and a focus on service in online marketing.

About Argos

Argos is the UK’s largest multi-channel retailer selling over 35,000 products across 14 different categories. Our affiliate programme offers commissions of up to 3% on all products. We offer a suite of promotional tools and weekly promotions. For more information visit www.argos-affiliates.co.uk.

Published on: 6:00PM on 19th October 2011