Affiliate Marketing Boosts Online Buying, Builds Brand Esteem

June 28, 2012

forrester-rakuten-affiliate-mktg-brand-image-june2012.png55% of online buyers always check for deals before purchasing, and 32% typically begin shopping on affiliate sites. And despite worries that affiliate marketing can harm brand reputation, this is not the case, according to [pdf] a report released in June 2012, commissioned from Forrester Consulting by Rakuten Linkshare. The report defines affiliate sites as including multibrand sites, coupon or deal sites, blog sites, loyalty, cash-back sites or comparison shopping sites, and estimates that US affiliate marketing spending will increase by a compounded annual growth rate (CAGR) of nearly 17% between 2011-2016, growing to nearly $4.5 billion.

Online Buyers Actively Seek Deals

Online buyers visit an average of 2.7 sites while researching a purchase decision. Some 65% of deal-driven buyers report it easier to find what they’re looking for on multibrand sites rather than from a single retailer or brand, and 57% of online buyers are more likely to purchase a product found on multiple sites than on a retailer’s site alone. Of those buyers, 48% agree that deals are better on non-retail sites than on a retailer’s or brand’s site, versus just 14% who do not agree.

Online buyers are usually shopping for the best price, and 43% of online buyers claim that promotional offers will “close the deal,” and convince them to purchase. A search for bargains does not equate to minimal spending, though. In fact, buyers who typically visit 4 or more non-retailer websites spent 34% more ($450) in the last 12 months than those who visited fewer sites ($1,780 vs. $1,330). And those who agree that they are more likely to buy a product merchandised on numerous sites intend to spend 39% more ($486) over the next 12 months than their less active counterparts ($1,712 vs. $1,226).

Of the types of non-retailer sites, Forrester found in October 2011 that visitors to coupon websites alone spent 13% more on average than the typical online buyer, and expected to spend 16% more over the next year. Specifically, visitors to coupon websites indicated spending $1,576 online in the past 12 months, compared to an average of $1,397 for all online shoppers, or $179 more.

Promotions Encourage Switching Brands

Data from “Affiliate Marketing – The Direct and Indirect Value that Affiliates Deliver to Advertisers” indicates that online shoppers who respond often to promotions are likely to try a new brand: just 11% of respondents who made fewer than 4 purchases in the survey period were likely to try a new brand, versus 42% of those who had made 4 or more purchases. 52% described themselves as likely to retry a brand they have stopped using after receiving a promotional offer from a non-retailer website, compared to just 11% who described themselves as unlikely to do so.

Returning to Forrester’s October 2011 findings, active coupon users proved almost 1.5 times more likely than light coupon users to try a new brand and/or switch brands — 74% to 54% and 61% to 43%, respectively. This implies that the more shoppers use coupons, the more open they are to trial.

Promotions Foster Brand Reputation, Loyalty

Brand marketers are wary of degrading their brands’ reputations by affiliate merchandising and advertising, but the report suggests that this strategy only improves reputations in the eyes of online buyers. Some 47% of online buyers agree that such promotions engender positive feelings toward a brand, versus just 12% who disagree.

The numbers vary somewhat by the type of affiliate site. 69% disagree that affiliate marketing on coupon sites, loyalty and cash-back sites and comparison-shopping sites harms brand image. But only 60% feel that way about shopping blogs. Blogs have the lowest esteem among those who believe affiliate marketing degrades brand reputation, with 12% believing blogs degrade reputation, versus just 6% who feel that way about comparison shopping sites; 8% about coupon sites; and 9% about cash-back and loyalty sites.

About The Data: Forrester surveyed 526 US-based online buyers and interviewed nine affiliates and advertising companies across verticals. Questions for survey participants gauged promotional offer use, attitudes and decision making. Questions in executive interviews focused on the current and future state of affiliate marketing usage, demand and incremental value, and the impact of promotions upon brand reputation. The study took place between December 2011 and April 2012.

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