At the end of June 2010 Econsultancy released its 94-page “Achieving Digital Balance” report where they look into the “best practices for mastering digital strategy and budgets”. There isn’t a tremendous amount of data on affiliate marketing in this report, but enough for me to outline a few interesting points.
While budgeting your company’s online spending, it is helpful to look at the elements of digital marketing based on their main mission. Econsultancy has placed affiliate marketing in the “Acquire” square:
I must admit, I absolutely love the above segmentation. However, but I would also argue that affiliates also help in the branding (let’s not forget those link impressions that aren’t being paid for), retaining and growing the current customer base, as well as converting.
“Affiliates” are also listed as first on the “Digital tactics A-Z” list. We are told that this tactic is used “predominantly” by “consumer facing companies, with some excepetions in the business products and publishing worlds.” My personal experience has also been predominantly in the B2C verticals (where affiliate marketing is working extremely well). So, I wouldn’t be able to judge of the B2B marketing much here.
Also, the following statement/observation is made by Econsultancy:
Companies that do well with affiliates have tangible, trackable conversions with a relatively short sales cycle. Otherwise, calculation of transaction value (or lead quality as the case may be) is difficut for the marketer.
In principle, I agree with this too.
Speaking of the typical budget allotment, Econsultancy writes:
For larger companies with active programs, affiliates might make up 9-20% of new customer revenue. In general, marketers report spending less than 10% of their digital budgets on affiliates — often much less.
There are also opinions on pros and cons listed, but I don’t necessarily agree with some of the logic (or observations). So, I’ll omit those here.
In general, this is another solid report by Econsultancy, and once again, it may be downloaded here.