In this day and age a rising amount of consumers are willing to research and shop online. According to PWC 2016 report, 52% of global shoppers prefer to research and shop online while 34% prefer to browse in store.

With the increase of consumers securing retail purchases online, the capacity and opportunity for digital marketing has widened heavily!

Allow me to introduce you to ‘Affiliate Marketing’, the channel that is here to stay.

(Affiliate Resources, 2012)

Affiliate marketing is when third parties promote and advertise another organisations product or service. The third party then goes on to receive commission from any sale generated.

For example….

(Amazon, 2015)

It is becoming gradually more difficult for organisations to ignore affiliate marketing as the impact and effectiveness of the channel continues to demonstrate advertising success, evidence shows.

Success in affiliate marketing…

In 2015, IAB reported that the channel is growing exponentially and is worth £351 million with consumers generating 125 million purchases deriving directly from the affiliate marketing channel.

The report highlights the increase in spend to £1.1 billion for the channel and rise of overall return of investment from 14 to 15.

After realising the success affiliate marketing is producing, numerous high-end luxury brands have taken an interest into the channel.

Brands such as Burberry, Alexander McQueen, 3Net-a-Porter all have tailored programmes to suit their needs. According to Patel (2015),”A programme can be tailored specifically to each brands requirements and set KPI’s to ensure that an affiliate programme adds value without compromising on brand perception”.

Click here to sign up to Burberrys affiliate programme and earn 10% commission on each sale!

 

Problem areas

The main negative associated with the affiliate marketing channel is fraudulent transactions. Companies are providing payment to third parties without confirming the product or service has been sold. For example, a customer would make a purchase, earn commission from the item and then return the product to process a refund. Fraudulent transaction’s related to the marketing channel has been a topic for discussion and has led to companies withdrawing from the marketing outlet (Patel, 2015).

As time progressed, the affiliate marketing channel has seen the creation of anti-fraud systems on both the consumers’ side and from an affiliates. Furthermore commission is now being provided after the returned date has been exceeded which is a win for the longevity of the channel.

Why is affiliate marketing effective and delivering success?

Marketing is all about spreading your ideas to the masses in an effective manner and the underlining problem with this in today’s society is that the public are informed with a wide range of choices to choose from.

As a result of people becoming resilient to the persuasion of advertisements, a path for affiliate marketing has paved way.

Now for the introduction of The Two-Step Flow of Communication Theory (Lazarsfeld, et al. 1944)

The theory communicates that ideas are conveyed through mass media to influencers, which is then regurgitated to the public in a subtle way. Lazarsfeld (1944) theory relates to affiliate marketing as companies produce an advertisement that is then handed to third parties (influencers) and then finally being marketed to consumers.

Critically the theory behind affiliate marketing’s success is that when a social influencer (third party) conveys a company’s message, the message is portrayed more authentically, which gains the trust of the consumer.

Having said that, in certain instances, using a social influencer to deliver your message is still likely to be more influential than advertising.

Watch the following video to see the top 10 affiliate marketing companies!

 

References

The Beginner’s Guide To Influencer Marketing: Theory & Practice. [online] Available at: https://medium.com/@TrendJackers/the-beginners-guide-to-influencer-marketing-theory-practice-8c7627024682 [Accessed 24 Nov. 2017].

Patel, K. (2015). Why all ecommerce brands should be doing affiliate marketing in 2015. [online] iCrossing. Available at: http://www.icrossing.com/uk/ideas/why-all-ecommerce-brands-should-be-doing-affiliate-marketing-2015 [Accessed 23 Nov. 2017].

Curtis, M. (2017). 3 Awesome Examples of Affiliate Marketing Websites. [online] Affiliate Resources, Inc. Available at: https://www.affiliateresources.org/3-awesome-examples-of-affiliate-marketing-websites/ [Accessed 14 Nov. 2017].

Lazarsfeld, P. and Stanton, F. (1944). Communications research. New York, NY: Arno Press