Affiliate Marketing Blog - a Traffic Junction Blog

eMarketer has released its UK Internet: Users and usage report that shows some very positive numbers for businesses that can benefit from people going online. Highlights include:

• Last year, about 37 million people or roughly 60% of the population went online in a month; this figure is expected to rise to about 42.8 million (roughly 70%) of the population by 2011.
• Online sales in the UK will almost triple to reach about GBP 84 billion by 2011 from about GBP 30 billion in 2006.
• Almost 40% of online sales in Western Europe will come from the UK; while UK’s share of the overall online sales will continue to drop over the next few years as e-commerce takes off in other parts of Europe, it will continue to be the leader in online sales for some time to come.
• Books, grocery and travel are probably the three biggest categories that shoppers spend their money on (at least based on the top online shops they are seen to visit).
• The average spend per e-buyer is likely to be close to GBP2000 this year, which is a 20% growth compared to 2007. This figure should be exciting to affiliates who are more likely to be interested in the near-term possibilities.
  Of course, as I said in a recent post related to the projections for affiliate marketing from e-consultancy, I would be a bit wary of being too optimistic this year.

Interestingly, the eMarketer report points out that online shoppers seem to be very satisified with their online buying experiences. Security also seems to be less of an issue. Both of these contradict most other studies that have come out in recent times, related to security of online transactions and the satisfaction levels of online buyers.

What does that mean? Your answer is as good as mine..

Last week Commission Junction announced the change that Yahoo! Search Marketing has made to its editorial policy regarding affiliate marketers (publishers) sending traffic directly to advertiser (merchant) sites. Here’s the announcement from the latest issue of the CJ Wire.
Yahoo! Search Marketing Becomes More Publisher Friendly
After more than six months in the making and much customer feedback and testing, we are pleased to announce that Yahoo! Search Marketing (YSM) has recently updated its editorial policies and will now allow U.S. publishers to direct link to their advertisers. In the past, YSM’s editorial policy prevented publishers from linking directly to their advertiser partners and required that traffic be sent first to the publisher’s Web site. The new policy eliminates this restriction and opens a much broader search marketing opportunity for publishers.

This YSM policy change is the result of a strong relationship between Commission Junction and YSM. We have spent more than six months working with YSM to enact the new editorial policy and are very pleased that this effort has resulted in changes that are sure to create opportunities for our publishers and advertisers.

We find this policy change exciting on several levels. First, this is a significant shift for YSM and could be a great opportunity for your search marketing campaigns. Second, you heard it here first – YSM has asked us to communicate this change to the affiliate community. Third, the work we’ve done with YSM on this policy change is just another example of our commitment to listening to and speaking up for our publishers.

So, if you’re running search marketing campaigns but have left YSM out of your marketing mix, now is a great time to expand your efforts.

I read this announcement with some excitement initially- implementation of this meant one step less in the conversion funnel, which will most likely increase the conversion rate. It’s one obstacle less to the commision cheque. Affiliates that are smart at playing the PPC game ie. the ability to buy better quality traffic at lower costs than the competition can certainly benefit.
However, some questions immediately cropped up:
Is the change in policy another attempt by YSM to get a bigger share of the spend from affiliate marketers? The big affiliate publishers are known to spend significant amounts in buying search engine traffic and could it be that Yahoo reckons it is losing out on some of this traffic? Does YSM believe that the new policy increase competition amongst affiliates and thus boost the cost per click?

While YSM may allow publishers to drive traffic directly to merchant websites, what about the advertisers/merchants themselves? Several adverisers prohibit affiliates from sending PPC traffic directly to their sites due to competitive considerations, and that situation still doesn’t change.

All in all, I feel we could see affiliates allocating a bit more PPC spend to YSM ; and we should soon be hearing about some results from actual end users.

AOL has bought UK affiliate marketing business buy.at for an undisclosed price to boost its online advertising business. This is the fifth acquisition for the Internet media giant in the past year; it had also made a failed attempt at acquiring TradeDoubler.

Even while there is talk of splitting up AOL into two, with much greater focus on the content/media/advertising side of the business, the company has beefed up its online advertising portfolio with contextual advertising, behavioral advertising and affiliate marketing. The latest acquisition provides considerable synergy to their business, especially with the rapid growth that buy.at has been experiencing in the past few years. The latter earns about GBP 25-30 million revenues annually and has been profitable for the last three years according to its CEO, Kevin Cornils.

buy.at had made its foray into the US towards the end of last year. Being part of such a large parent organization, it will have the opportunity to not only further its reach in the US market, but also jointly look at expanding its presence in the European market.

The news of this acquisition will undoubtedly be overshadowed by all the talk about the Yahoo-Microsoft merger and the impact on the online advertising business. While it is certainly not in the same league, the significance of this acquisition shouldn’t be underestimated, particularly when it is viewed in light of AOL’s other purchases during the past year.

Despite the continuous and often unbelievable growth rates experienced by the online retail sector in the UK, it continues to face threats from online fraud. Cybersource has released its Fourth Annual UK Online Fraud Report, based on a survey of about 165 UK merchants of varying sizes.

The report says that merchants are having to invest heavily to ward off the threat of online fraud, with annual expenditure in the vicinity of GBP160,000 for mid-sized companies! The main issue seems to be the lack of a coherent effeort to tackle this problem. Currently, the responsibility for overcoming the problem seems to rest with the retailers, ISPs and card schemes, with very little proactive assistance from the regulators or the police. The need for a single, independent body to track organized fraud and handle it appropriately is very obvious; question is when and if it would happen.

As affiliates are mainly dependent on successful online transactions, anything that impedes e-commerce is an issue. The last thing affiliates need is a lack of confidence or doubts amongst online shoppers about security of their credit card information; unfortunately there is very ittle in their control to prevent or reduce these fraudulent activities.