Posted 6. April 2009, 08:54 by Emma Langan
Category : Home   Industry developments

Is this the future of online marketing? As banner ads and click-through’s begin to lose their effect and lustre within the marketplace does this mean that affiliate marketing will take centre stage. If Google gets their way this will not be the case. They have stated that they do not wish affiliate sites to spring up on their consumers search engine results as this will just result in lists and lists of affiliates knocking off official merchant websites in place of them. Deterring people from Google due to annoyance and pushing them towards competitor search engines. Google’s interest lies in maintaining people and this marketing technique could affect this, questioning affiliate marketing’s future in this area.

There are arguments that there are already too many affiliates in existence and it is predicted that more are likely to be introduced. This questions the future of online retailers, how can they fight back in order to ensure that they will not be forced into handing out cash back returns constantly or other incentives? How can they regain their power? There are a number of options open to them. One being that they jump ship and not join affiliate sites in the first place. Although as discussed in (BLOG ) this could prove risky as consumers may switch to competitors that still offer incentives. They could force the commission rates that affiliates wish to charge down by joining together and imposing this as Tesco successfully achieved. Tesco have been able to erode its affiliates’ power by only paying 2% commission to its affiliates that drive people to the site for the first time. This has only been accomplished due to Tesco’s clout and size within the marketplace that has enabled this power hold. Not many other companies may be able to enforce this but in the long run it looks likely that commission rates will fall as repeat purchases start to take place and other companies power increases to implement. Or they could agree to share a fee between the affiliate and the merchant through a subscription charge reducing the impact of cash-back handouts.

It is argued that affiliate marketing is likely to become the main online marketing tool in the future due to the results it can obtain in relation to the cost that it incurs. It represents the ultimate in genuine pay-for-performance marketing and thus embodies one of the most promising long-term marketing strategies for the future of e-commerce (Duffy, 2005).

The future is yet to be decided. Although it looks likely that affiliate marketing is here to stay as it picks up in popularity with consumers, advertisers will increasingly incorporate it into campaigns and it’s up to retailers to decide how to handle this.