Affiliate Marketing: Pros, Cons and Other Considerations

Posted onLeave a commentCategoriesAffiliate Program Management, General Discussion

Pros and consI’ve just finished reading an interesting article in the UK’s Marketing Magazine where they look at affiliate marketing, giving their take on the pros and cons, as well as quoting some interesting statistics.

You may read the full article here (it’s got some good tips for merchants new to affiliate marketing), but here are some of the things that I personally have found of interest:

Interesting Facts

  • Firebox has grown from a 1998 startup “into a global retailer with a turnover close to £20m in 2010” and “much of Firebox’s rise has been based on partnerships with affiliate marketers”
  • “Furniture retailer Harveys started to use affiliate marketing in September 2008, and the channel now accounts for about 20% of its online sales”
  • Lastminute.com has relied heavily on affiliate marketing since it started working with agency Commission Junction in 2003″ and now “represents a substantial proportion of Lastminute.com’s business”

Generalizations & Disagreeable Statements

  • Affiliate marketing networks claim there are no risks involved in affiliate marketing [generalization]
  • Brands that start an affiliate marketing program must realize “that affiliates effectively become their representatives” [in a way, they can be viewed that way, but it is important to understand the disconnect that exists in this relationship between an advertiser an an independent marketer]
  • Running an affiliate program on multiple networks can be one of the keys to building a substantial one [disagreeable proposition | see this article of mine]
  • “If affiliates bid on the same paid search terms as the brands they are promoting, both will effectively lose out” [disagreeable statement | while protecting your trademarks is a must, restricting affiliates from bidding on the keywords you’re bidding will not necessarily help you much, because your competitors will still keep bidding on them, landing sales that you could’ve landed through affiliates]

One of the statements that I do want to echo in conclusion, though, is this one:

…affiliate marketing landscape can be a minefield. In the worst cases, they [merchants] can effectively lose control of how their brand is represented online.

Just add “if they choose to run their affiliate program on an autopilot” and you’re right on the money there!

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