In times of financial gloom, one of the first industries to feel the pinch is usually advertising.
As businesses begin to look for ways to cut expenses, they look to cut advertising budgets in order to reflect smaller consumer spending. Nowadays however, companies are beginning to realise there can be marketing opportunities online even in a recession.
The main industry to benefit from this revelation is affiliate and performance based marketing. Even as economists are talking about deficits and depression, affiliate marketing has shown amazing growth year on year since its conception in 1996. According to one report, the total sales amount generated from affiliate marketing in the UK alone jumped from £1.35 billion in 2005 to £2.16 billion in 2006. The reason for this growth is that affiliate marketing has advantages that most brands fail to realise.
Affiliate marketing is not a new idea. Amazon began using the technique in 1996 when they allowed their associates to place a banner or link to the Amazon web page. When a visitor to the associate website clicked the link, and purchased a book, the associate received a commission. Many people credit Amazon’s program with being a key ingredient in their success. However, many companies have only recently begun to use this model.
It seems that most major advertisers and mainstream brands have been slow to adopt affiliate marketing, probably because of old, outdated ideas about the risks involved. For some time affiliate marketing was mainly used by the adult and gambling industries, and it has been hard for the model to shake off its reputation. However, it seems that performance marketing has grown up dramatically and thrown off its old image in the past few years. Part of the recent successes of affiliate marketing has been attributed to the rise of blogging and social media in general.
Nowadays, the internet allows anyone with the right attitude and enough time on their hands to create a website with niche content, and once you have lots of original engaging content, you will be generating a lot of traffic. This means you can make a lot of advertising dollars by renting space on your page. Most brands are becoming interested in affiliate marketing because it opens up the door to a whole untapped market for them to advertise to, and guarantees results by using the pay per sale instead of pay per click compensation method.
What most people are saying in the affiliate and performance marketing industry is that it has matured a huge amount and many brands are starting to take a serious look at it and beginning to consider it the bread and butter of their marketing methods.
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