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Affiliate Marketing around the world UK 2 12

The United Kingdom is considered to be one of the most internet-based economies in the world. According to official surveys in 2010 the UK had approximately 62 million inhabitants. Mid-year 2012 21 million households had internet access, which corresponds to an internet penetration of roughly 80%. [caption id="" align="aligncenter" width="583"]affiliate-marketing-in-uk Source: http://de.fotolia.com/id/42485446; Urheber: anshar73; Fotolia ID: 42485446[/caption] In 2011 companies spent £4.78bn on all forms of internet advertising , with 14.4% year-on-year growth the biggest surge since 2007. The strong growth was partly due to a rise in advertising on mobile devices and tablets, which rose 157% to £203m last year. The UK is now the world’s third-largest market for mobile advertising. Online video advertising doubled year-on-year to £109m as online on-demand TV services increased in popularity. In an eConsultancy survey (2009) 43% of all participants identified Affiliate Window, which is now part of Zanox, as the most important network in UK regarding the income of affiliates. Second is Tradedoubler (18%) followed by Commission Junction (10%). The most important criterion in choosing an affiliate network is the selection of merchants. Zanox used to play only a minor role (1%) and succeeded to improve their status in the UK considerably by merging with Affiliate Window.  Besides Affiliate Window and Buy.at, which is no longer in use, webgains and Tradedoubler were among the most popular networks in the UK, last year Affiliate Window was even declared “Best CPS Network” at the Affiliate Marketing Awards. In order to obtain the insights of local experts on affiliate marketing in UK, we asked several questions to our partner Net Media Planet: 1.       What kind of ad media do you think works best in UK and why?
  • The stalwart of UK internet ad spend is Paid Search advertising, which is dominated by Google. Though, merchants are increasingly recognising the necessity of a multi-channel strategy. Paid Search now accounts for 58% of total UK digital ad spend. This popularity has come from the British public's love of web search and the cost-effective nature of search advertising.
  • Display advertising has grown significantly across the internet and mobile in the UK, boosted by the increase in video and banners in social media. This is coupled with the big FMCG companies – historically the biggest UK merchants on traditional media, such as TV, press and radio - now beginning to recognise the benefits of display ads.
  • Classifieds still plays an important role in the UK ad spend; with spend increasing at a steady rate year on year.
  • Email direct marketing still thrives, with the overall value of the direct marketing industry to the UK economy being £15.2bn.
 2.       Which developments do you expect in the future? What are the potential companies / brands that may be important?
  • One clear indication of UK’s commitment to greater online growth is the level of investment UK government and merchants are making to help bring digital into the everyday lives of UK residents.
  • We can expect the online advertising market to grow as a whole. In particular, we expect search and display to grow more rapidly than the more traditional marketing channels.
  • Cross-device tracking will improve value attribution and performance. We can expect to see cross-device tracking solutions emerge that will enable better measurement of the value that each device brings. For brands looking to take advantage of this innovation, watch Google and Drawbridge. Both innovations will provide more accurate value attribution across devices but also improved targeting – the ability to target consumers on one device and target the same people on their other devices.
  • Display advertising ROI is set to grow thanks to Facebook and Real Time Bidding. In 2012, Facebook Exchange was launched. It opened up a large pool of inventory to the marketing discipline of Retargeting, the results are so far looking positive with reports of ‘click to conversions’ 50-100% higher than for standard Display ads.
  • We will see more mobile innovation in the UK in 2013. There’s still plenty of room for growth - around 60% of the UK’s 100 biggest merchants still don’t have a mobile-optimised website, yet consumers spend almost 70% longer on mobile sites. However most UK merchants expect mobile commerce to be part of their main strategy within the next 12 months, and more than 40% plan to have a transactional mobile site or application within the next year.
  • Selling internationally will be a major focus for brands. UK brands have been exploring new international opportunities. This trend is set to continue and grow in 2013. If we take Europe, ecommerce sales are rising faster than in the UK. Looking further afield, without a doubt, consumers in high growth markets like China, India and Brazil are keen to buy from UK brands.
3.       What is the growth potential of Affiliate Marketing in the UK in comparison to other countries?
  • The UK Internet Affiliate marketing sector is currently valued at over £4 billion – that figure is set to grow.
  • Consumers are very familiar with the major Affiliates in the UK such as Quidco and Topcashback who have been heavily promoting their benefits offline across the UK through TV advertising, poster and banner campaigns.
  • With marketing budgets being tightened as a result of the UK facing economically challenging times, marketers need to be more certain of their return on investment. As a result, we expect that the attractiveness of paying for advertising based on an extremely measurable and specific consumer action will see more merchants using Affiliate Marketing as a key channel for driving sales.
  • There is growing awarness among the UK population that they can save money online. This growing perception, coupled with current economic conditions and a lower level of disposable income will bring Affiliate Marketing to the forefront. Increasingly UK consumers‘ online behaviour is to research for the best deals , and the Affiliate channel is increasing in popularity as such.
  • Affiliate Marketing offers an attractive option to small and medium business. The channel allows them to communicate the product range to audiences without high upfront investment.
4.       What kinds of fraud are common? We wouldn’t say that the UK market is particularly rife with fraudulent activity; however like all markets it is susceptible. Below we share some examples of fraudulent practice that are known to operate in the UK:
  • Some Affiliates use spyware or adware to claim commission on merchants’ organic traffic - traffic merchants would otherwise have gotten for free.
  • In other cases, it may be what’s known as ‘cookie-stuffing’ – faking clicks when users merely view a web page, receive a banner ad, or read a discussion forum. If that user later happens to make a purchase from the targeted merchant, the Affiliate gets a commission – even though the Affiliate never actually promoted the merchant.
  • Stealing voucher codes – this is the practice where the publisher takes a voucher code from another publisher website and puts it on their own site promoting it as their offer.
5.       In your opinion, how important is mobile Affiliate Marketing in UK?
  • More than just a niche opportunity, over 70% of smartphone owners use their phone to research purchases, with 31% doing so on a weekly basis.
  • In addition, almost a quarter of consumers making purchases using a smartphone have conducted research on comparison shopping sites, whilst 19% of those using a smartphone in a store environment are searching for vouchers to download. Also, more than half of all smartphone owners (53%) have bought something other than a small download (such as apps) using their handset, and 27% buy online every month.
However there is still work to do in this area:
  • Although mobile is increasingly important in Affiliate Marketing, there are still many advertisers who do not have a mobile optimised site.
  • Furthermore, mobile is still often used as a device for research with the last click in the sales process still coming from desktop and thus the sale getting attributed to desktop rather than mobile. This is resulting in less focus being paid on the mobile channel in Affiliate Marketing than in other areas of digital marketing.
6.       What role plays Google as an Affiliate Network in UK? (Please note: Meanwhile Google decided to retire Google Affiliate Network
  • At present Google is working successfully with a number of small-medium sized businesses, in order to gain a foothold in the market.
  • In addition, Google is also having success as a second network, and as a result has been successful in acquiring the Affiliate business for a handful of top retailers.
  This blog entry was written in cooperation with Net Media Planet, a member of “Yamondo – the Global performance Alliance” founded by explido. Sri Sharma of Net Media Planet was one of this year’s speakers at Affiliate TactixX and spoke about the potential of mobile search. We would like to thank Net Media Planet for this interview. The German version of this article can be viewed here. Author: Jeannette Petz