Australian affiliate marketing continues to grow

Eight in 10 respondents currently engage in affiliate marketing, according to the 2012 Australian Affiliate Marketing Benchmarking survey, which was commissioned by online performance marketing agency and affiliate network dgmAustralia and conducted by market research company edentify in June 2012.

With a total of 143 responses, including 59 media agencies and 84 direct clients, the results show that there is an intention to increase spend on affiliate marketing as agencies and advertisers increase budgets or move to an uncapped ‘always on’ sales campaign model.

More direct clients (86 per cent) than media agencies (74 per cent) are using the channel. However, media agencies tend to spend more on affiliate marketing than direct clients, with more than half (52 per cent) spending upwards of AU$26,000 (US$27,244) per month and 40 per cent of direct clients spending the same amount.

Although 56 per cent of respondents do not put a cap on their affiliate marketing spend, an increase in spend over the past year was indicated by almost two-thirds (63 per cent) of all respondents. Media agencies were more positive, with 71 per cent indicating an increase, compared to 58 per cent for direct clients.

Media agencies are also more optimistic about the coming year, with 71 per cent indicating an expected increase, compared to 53 per cent of direct clients.

The affiliate marketing channel is still in its infancy in Australia, with the majority of respondents (76 per cent) indicating they had been using the channel for five years or fewer. That figure is slightly higher for direct advertisers (77 per cent) than agencies (71 per cent).

The retail (76 per cent) and finance (82 per cent) sectors are the highest users of affiliate marketing in-house, with the most-used type of publisher sites being comparison, followed by content.

“Retailers in Australia use the widest range of affiliate marketing techniques to achieve their results, including comparison sites, content, coupons, loyalty and rewards programmes, cash back and brand bidding PPC,” said John Matthews, general manager, dgmAustralia.

“Retail is one sector where there is enormous scope for growth,” Matthews said. “It’s possible a shift in attitude towards capping budgets and treating it more like a sales channel will help retailers connect with the unique benefits of affiliate marketing.”

The study also shows the majority of respondents from both media agencies and direct clients reported their spend on affiliate marketing is taken from the marketing budget, which by its very nature is capped. Media agencies are, in the large majority (63 per cent), capping their monthly affiliate spend, compared to 34 per cent for direct clients.