Despite the recession, affiliate marketing is experiencing a phenomenal growth, driving around £4.62 billion in online sales over 2010 in the UK, according to a report by Econsultancy. Although the growth is incredible, innovation is key to add value for customers and drive even more growth in the affiliate marketing industry. Let’s explore some of the latest trends that have boosted this growth.
With the recession, many affiliate programs have been cut down or completely withdrawn because of the number of popular and familiar brands going out of business. For those with the perfect business models in place, however, this economy has provided opportunities for affiliates. More consumers are now researching products online and scouring the web for bargains, providing the perfect base for entrepreneurs to innovate and seize the ripe market.
Those who have adapted their business models to fit the economy have flourished, with several voucher-code and cashback sites thriving. Group-buying bargain sites such as Groupon and LivingSocial have created win-win situations for both affiliates and consumers in the fragile market and are quickly gaining ground. Although many popular sites are still going into administration, it is likely that this consumer behavior with the focus on saving money will continue as the economy seems to recover.
Unfortunately, unethical actions by a small number of affiliates have tarnished the industry’s reputation. Although there is an ongoing attempt to increase transparency, there will need to be a massive change in the best practices to bring consumers back.
One of the hottest topics in the industry is how to assign value to marketing, and how fair last-click-wins models are since they are more appropriate for some websites than others. A fairer system is needed, such as eBay’s quality-based CPC model, which pays commissions to every channel that contributes to a final sale. Although this system is fairer, a system like this will have to be managed properly to prevent the watering down of commissions to a point where the campaign isn’t profitable for any of the affiliates involved.
The next logical step for voucher-code sites would be providing their services in realtime, allowing consumers to compare prices of a specific product in-store. Some sites, such as VoucherCloud, have already capitalized on this concept by using smartphones to redeem vouchers in-store. The problem with mobile services is the limited options for advertising but the new concept of monetizing free applications by using in-app adspace solves this problem easily.
Affiliate marketers now need to think of adapting their business models to sustain long-term growth instead of short-term profits. This will provide sustainable value for both customers and affiliates, allowing the industry to grow even further in the unstable economy.
ABSEM-AMM.com aggregates Affiliate Marketing News & Affiliate Marketing Tips written by Affiliate Marketing Management Experts.
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