MarketingSherpa: Retailers Spending Less on Affiliate Marketing

by Jeff Molander

That’s right, Anne Holland says affiliate marketing spending is taking a marked downturn… print it!

I’ve been taking quite a beating by industry colleagues—even the affiliate marketing’s biggest name, Shawn Collins, for years now based on my repeatedly insisting that retailers are pro-actively shrinking their affiliate marketing programs while concurrently ratcheting up search marketing spending.  I’ve been accused of everything from making things up to consulting with a minority of clients that aren’t representative of the industry as a whole.  It even got so ugly (truthful?) at Revenews that they deleted all the comments!

I’ve had an occasional opportunity to bring forward people like Jeff Nienaber, Lisa Papageras and John Hoge to back up my statements but that’s not been enough for the likes of Shawn Collins or David Lewis. Even’s David Jackson has suggested that affiliate marketing audits aren’t *really* becoming widespread since I’m not providing “any data to back up the claim.”

Suggesting that ValueClick’s Commission Junction numbers aren’t being boosted… “enhanced”... “massaged”... by VCLK’s purchase of inkjet retailers isn’t enough?

Even bigger than Sendtec CEO’s acknowledgment of the clash between affiliates and marketers inside search MarketingSherpa’s Anne Holland and Stefan Tornquist are jumping on the bandwagon. 

According to Holland… one of the biggest, most respected names in marketing research… solutions like (surprise surprise!) Mercent and ChannelAdvisor are quickly capturing marketer’s dollars as they embrace SKU-level, rules-based PPC management.  Big whoop right?  Wrong.

While thumbing through her entire set of 2005 research and data, Holland noticed…

”... folks that were super, super heavy search marketers… tended to be spending a lot less on affiliate marketing. In fact, they were spending about half what the average marketer was spending on affiliate marketing.

So it seemed like if you ratcheted up your search marketing it sort meant you were taking away affiliate marketing from the affiliates.  You were in a way taking it in-house. So that has real implications for the future of affiliate marketing."

Tornquist responds…

"That’s absolutely right. And we’ve seen other data to corroborate that. That retail marketers, especially while the model of a few years a go might have been to use their affiliates essentially as an outsourced search provider because so many affiliates are quite advanced in using search marketing so retailers were willing to allow them to use trademarked and branded terms.

And really with the incredible growth in search and so much research coming out on the efficacy. I think a lot of marketers saw those sales as really being redundant.

Anne may have shown up at Affiliate Summit to give a rosy keynote… complete with with hugs, kisses and a not so subtle recognition of the industry’s feeling relatively under-appreciated (not so sexy since search marketing showed up)... but she’s not going to publish research that doesn’t reflect truths about what’s going on. 

For the retail segment, affiliate marketing IS, in fact, shrinking.

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