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Affiliate marketing in the UK has been growing – and will continue to grow in the next few years – according to a survey from E-consultancy sponsored by buy.at, a UK-based affiliate network.

Some 78% of respondents (239 merchants “working in the UK for a company which sells online through the affiliate channel” were surveyed) said they had increased their spend on affiliate marketing since 2005; 78% also said they plan to increase spend in the next two years.

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(Note: Those responding “don’t know” not included in chart.)

Additional growth-related findings from the study:

  • Nearly a quarter of those who are spending more in the channel said they have doubled their spend in the channel in the past two years, and a further one in 12 said they had increased spending 200%.
  • Two-thirds of respondents said the number of sales generated by affiliate marketing has increased over the past two years.
  • Some 40% of respondents have more people employed to manage their affiliate marketing activity compared with two years ago, and half of those surveyed expect this team to grow over the next two years.

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  • Half of responding organizations expect to have more people managing this channel in 2009; only 4% who expect to have fewer people.

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“As broadcast advertising has started to decline, performance marketing has emerged as the silver bullet of the marketing industry. Within that, search marketing has reached its peak, but affiliate marketing is still in a high-growth phase,” said Kevin Cornils, CEO of buy.at. “This represents a huge opportunity for both affiliates and marketers that understand the channel and appreciate the benefits of true pay-for-performance advertising.”

Findings related to barriers:

  • A network’s relationship with its affiliate base is deemed the most important consideration when choosing a network, with almost half the respondents rating it “extremely important.”
  • 38% of respondents agreed that “the affiliate marketing channel is becoming more mainstream and professional”
  • Half of the respondents agreed that the channel is improving “but there is still some way to go.”
  • Brand owners think they could still get more from their affiliate marketing activity: Four out of five merchants agreed, “I wish I could get more out of this channel.”
  • And 31% of merchants said they wish they could get more out of the combination of affiliate segments they use.
  • The biggest barrier to success is considered a lack of internal resources: One-third of merchants cite it as an issue.
  • Problems with tracking are seen as a barrier by half of those surveyed.
  • One-third of merchants agreed that spend in the channel is held back because they simply don’t know how much incremental volume it will deliver.
  • Respondents also saw “difficulty attracting affiliates” and “websites which don’t convert traffic very well” as barriers.
  • Only 13% said they have good communication with all their affiliates.

Vertical-related findings:

  • 68% of marketers in the financial services sector said they had been investing more in affiliate marketing, with half of them more than doubling their spend in the channel in the previous two years.
  • 72% of financial services marketers plan to increase this over the next two years.
  • 75% of gaming companies have increased spend since 2005, along with 62% of retailers and 64% of telecoms companies and 71% of travel companies.
  • 20% of telecoms merchants had at least doubled their spend on affiliate marketing, as had over one-third of travel companies.

About the study: A total of 239 UK merchants completed the survey in August and September; 76% of them were businesses that operate both online and offline. Half of the respondents who were aware of their company’s turnover said it was in excess of 50 million pounds (approx. $100 million) per year.

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