Is there room for my company in the affiliate-marketing world?

The rapid growth of the Internet and online services worldwide is only the beginning of a long-lived trend towards an economy built on the infrastructure of the Internet. The potential growth of the Internet has no ceiling, to where every person in the world could be carrying an electronic device, which will allow internet access. This may be 5 or 10 years down the road, but for the next five years, an online affiliate marketing company is sure to experience tremendous growth.

One immense change in the growth of affiliate marketing companies is all the inexpensive and vast amounts of web page production tools. These tools have given rise to a whole new generation of citizen publisher, and the citizen businessperson, creating affiliate marketing companies. Non-technical people, amateurs, and small business owners are using these new publishing tools to create their own sites and to broaden their reach just like larger companies. Today’s tools are demolishing the monopoly that larger companies traditionally have had on audiences through expensive ads on TV and in other large venues.

Today’s Web 2.0 platforms are finally making it possible to reach micro-niches, communities with very narrow interests in common. Many affiliate marketers have noticed and taken advantage of the micro-niche approach. For instance, affiliates select niche key phrases and long strings of keywords to reach those with very narrow interests instead of broad interests. LinkMo Business Services is one of many companies who will take a novice company and teach them on how to be a giant in the affiliate-marketing arena.

“The affiliate marketing industry is in the midst of rapid growth. A Forrester Research 2003 study found more than half of online retailers were using affiliate programs, and 99 percent of them said the tactic was effective at driving sales. That finding outstrips the approval ratings for email, search marketing and portal deals. In addition, affiliate programs generally can attain between 10 to 30 percent of a brand’s total online transactions over time. According to the 2003 Affstat Report, of active affiliate programs, 18 percent are driving 30 percent or more of total site transactions. “(www.imediaconnection.com)

According to a report by E-consultancy, retailers in the US are seeing positive results from affiliate marketing. The research group surveyed 239 merchants in 2007 and most of them have both online and offline presence. A full 95% of brands said that affiliate marketing is ‘very cost-effective’ or ‘quite cost effective” way to market their product or service. The next most effective ways to acquire a new customer is to pay for a search and then email marketing. On average, the retailers spend 18% of their online marketing budget on affiliate marketing. The industries most benefiting from affiliate marketing are telecom, financial services, and travel retailers. Affiliate marketing is growing fast; here are some facts from the report:

78% of brands set to increase their investment in affiliate marketing over the next 2 years.

 78% have already increased their spend over the past two years – many times drastic increases.

 23% of US marketers have more than doubled their investment since 2005.

According to a study conducted by Shop.org and Forrester, just about 55% of the retailers have affiliate programs, leaving about 45% of the only online retailers have affiliate programs. The study did not look at the companies that do not have a web presence but need to, thus leaving a large portion of the market open for affiliate-marketing companies.

James Marciano, founder of Refer-it, once referred to affiliate marketing as "a recession-proof marketing channel," and he was right on. In the world today, affiliate-marketing companies are the wave of the future, and a new revenue stream for companies. We are currently seeing tremendous growth in the area of affiliate marketing, even as other segments of the country are shrinking due to the economy.

E-consultancy’s Head of Research Linus Gregoriadis said: "Affiliate marketing continues to gain momentum because the performance-based model is so popular with advertisers. The whole industry is getting more professional and 2007 was definitely a big year for affiliate marketing. The affiliate marketing companies have become much more strategic and boardrooms are starting to take notice." Further studies show that 95% of companies that engage in affiliate marketing appreciate how "cost-effective" this strategy is, especially in growing customer bases and increased revenues.