Affiliate Marketing 2005 Analysis

Affiliate marketing prognosis was a discussion topic in the news near the Eve of the upcoming 2005 year. The last MarketingSherpa's report shows that 2005 will be a promising one for the expectations that marketers and businesses put in their efforts.

The December affiliate marketing survey results are defined to be a good revenue growth and super popularity of the most implied marketing strategies.

According to the report, 2004 has been a particularly tough year with merchants' fears of dishonest adware/spyware, CAN-SPAM legalities, and paid search arbitrage. These experts' worries lead to an expectation of a decline in the affiliate marketing industry of $1.5 billion.

The surprising December survey results show that affiliate marketing is alive and well. The data shows that overall 91% of surveyed merchants and 82% of affiliates expect revenue growth in 2005.

Four key worrisome tactics were defined as directly affecting the revenues; the first of which is search marketing. According to stats that MarketingSherpa provides, somewhere between 30 and 40% of affiliates depend almost entirely on search engine marketing to drive traffic.

The result of the marketing survey shows that 49% of all affiliate respondents said they would not be willing to work with a merchant that banned all paid search.  Additionally 27% said they would not work with a merchant that banned trademark search ads.

On the other side, continues the report, 51.1% of surveyed merchants had restrictions on search marketing. 8% are counted to report that no affiliate could use any search, and 7.4% allowed organic search campaigns only.

Due to these statistics, the experts suspect affiliate revenues driven by search will decline in 2005 because of the Google "death dance". The estimations show that in short-term this would hurt Google revenues, but it will lead to a reduction in potential trademark lawsuits.

Email marketing and CAN-SPAM is considered to be the second most worrisome factor in estimating the future marketing results. Only 10.8% of surveyed affiliates described themselves as primarily an email marketer, according to the survey. Acording to the survey, only 13.4% merchants allow affiliates to email without restrictions.   

Pop-up issues also seem to be a discussion topic. Although consumers say they hate pops, says the report, the darn things still work well enough that 24% of surveyed affiliates told us they would cease working with a merchant who banned pops.

The report also shows that he first rule of successful direct response marketing is measure, measure, measure. The survey results show, however that the merchants don't seem to put in much effort with result tracking.

In estimating the weight of the branded destination sites in affiliate marketing, merchants have long admitted that only 2% of their total affiliates really show any signs of performance.  It has also been shown that these consistent performers tend to be known name brands.