The UK market for affiliate marketing will grow 60% in 2006, breaking through the £2 billion mark to an estimated value of £2.16 billion, according to research published in E-consultancy’s Affiliate Marketing Buyer’s Guide this week.
What is affiliate marketing?
A system whereby an advertiser shares revenue with other websites (known as affiliates) which feature ads and content designed to drive traffic to the advertiser’s site. Affiliates receive commission on sales (or leads, or sign-ups).
The UK Affiliate Marketing sector, which has more than tripled in size since 2004, has made huge strides since it was first used by marketers ten years ago.
Online businesses increasingly see this as an invaluable way of generating extra sales by using networks of websites as a virtual sales force to broaden their reach.
Origin of affiliate marketing
It was only 10 years ago since, according to internet legend, Amazon founder Jeff Bezos became the first to embrace affiliate marketing after chatting with a woman at a party about how she wanted to sell books about divorce on her website. The idea – which is central to how affiliate marketing works – was that she should link her site to Amazon.com and receive a commission on book sales as the affiliate.
Where is affiliate marketing now?
Now, just a decade later, affiliate marketing managers are commonplace within online businesses, with a number of well established networks acting as intermediaries and facilitating the relationship between retailers and thousands of publishers of all shapes and sizes.
E-consultancy analyst Linus Gregoriadis said: “Affiliate marketing has gone mainstream as companies with an online presence increasingly embrace this as a cost-efficient and low-risk channel to market. In the last few years this sector has gone from something very niche to something of strategic importance within businesses.”