Monday, July 9

Marketing Affiliates: Are They Worth The Time?

Rakuten LinkShare released the results of its June 2012 Forrester Consulting study. The study was commissioned to determine the direct and indirect value of affiliate marketing, but its importance reveals compelling data for social media and online advertising as well.

Specially, the report demonstrates why social media and similar marketing efforts cannot be measured like direct response, with definitive paths to product purchases. This is especially interesting because affiliate marketing pays publishers based on direct clicks to the point of purchase.

Key findings about affiliate marketing from Forrester.

• Affiliate marketing spending is on the rise and will keep pace with digital marketing through 2016. Total marketing spending will increase from about $2.5 billion to $4.5 billion in four years.

• Affiliate making channels produce more new-to-file customers and generates incremental customer acquisition. Some brands report 50 percent of the traffic received by affiliate marketers are new buyers.

• Affiliate marketing channels attract consumers that spend more than the average online shopper. The difference is approximately $500 more per year, with average shoppers spending about $1,300 per year. 

• Affiliate marketing channels trigger brand recognition and can close the sale for online shoppers. Online shoppers typically visit four sites before making a purchasing decision. 

• Affiliate promotions have a positive impact on an advertiser's brand reputation and loyalty. Almost half of all consumers report a positive feeling when they see special offers on multi-brand sites and blogs.

"The study reflects how the affiliate marketing industry is strongly aligned with today's value-driven, always connected consumer who typically visits multiple sites before making a purchase," said Scott Allan, senior vice president of global marketing, Rakuten LinkShare. "As interactive marketing budgets grow and evolve, affiliate marketing will continue to be a key, measurable tactic for brands and retailers to attract and acquire new customers."

Considering the crossover as it relates to social media. 

• Investments in digital advertising, online marketing, and social media are continuing to rise whereas other mediums have flattened or demonstrated a loss in the last ten years.

• Third-party introductions and endorsements have become increasingly important to prospects before they consider new products and services as opposed to direct path purchases. 

• Shoppers may visit multiple sources to learn about products and services, even when they already have a connection to the brand, which makes outreach as important as direct communication. 

• Shoppers who visit more than one source for promotions, coupons, and reviews online are much more likely to make a purchase and spend more than people who are dedicated to a channel. 

• While some people question third-party endorsements and agendas, the majority of consumers are unconcerned because they are visiting more than one source of information.  

One of the more interesting aspects of the study is that consumers have a general presumption that brands will offer better deals on multi-brand sites and blogs than they will on their own sites. The study also hints at the influence of review sites frequently visited by consumers. They are nearly four times more likely than average buyers to try a new brand after seeing and receiving a new offer.

The study has been made available online. If you would like to read the study, find it here. The download does require several content fields, including an email address and phone number. 
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