Affiliate marketing most cost-effective channel for UK merchants

At the recent Affiliate Summit in the UK, e-Consultancy did a keynote presentation, based on a survey of over 240 UK merchants [survey sponsored by buy.at]. The presentation can be downloaded here.

Some of the highlights:

• Affiliate marketing drives about 16% of total online sales for these merchants [about GBP 3 billion in sales value projected in 2007]
• This is the most cost-effective channel for customer acquisition- better than paid search or e-mail marketing [of course, I suppose there would be under-counting of the overall effectiveness of paid search marketing since many affiliates themselves would be doing that]
• Almost two-thirds of merchants surveyed have increased sales from affiliate marketing, while about 80% have increased their spend on this channel.
• Mobile marketing has a very long way to go in terms of cost-effectiveness as well as driving volumes for merchants, despite a lot being said about it.

It is interesting to see the major barriers to greater adoption & results from affiliate marketing from a merchant’s perspective: Lack of internal resources, poorly converting website, restricted budget, difficulty in attracting affiliate(s), problems with tracking [it must be stated that the overall percentage of folks citing these as major barriers is not very high].

Of these, the first three factors are definitely controlled almost entirely by merchants. If merchants are saying that this form of marketing is indeed the most cost-effective, then wouldn’t it make more sense to do more to optimize it?

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