Retailers’ online marketing shifts heavily to P4P affiliate relationships
Pay-for-performance affiliate marketing is getting a bigger piece of merchants’ online marketing budgets as retailers look to squeeze more accountability out of their marketing programs. Since fall of 2000, for example, when mobile device seller Handspring Inc. signed on with affiliate marketing services provider LinkShare, it’s seen its payments to affiliates under revenue-sharing deals climb from zero to 26% of its online marketing budget in the last quarter, says senior manger of customer acquisitions Brook Lennox.
Liz Claiborne Inc.`s Elisabeth plus-size division e-commerce vice president Brad Lentz says affiliate marketing remains his least expensive customer acquisition tool in a program that includes portal deals and e-mail list rental, and that it`s driven significant sales growth over the past year. And LinkShare customer Dell Computer Corp. is seeing three to four times as much traffic coming through its affiliate marketing program than it did last year and is spending three to four times as much on pay for performance affiliate marketing as a result, says Deborah de Freitas, senior online manger at Dell’s home systems unit.
“A few years ago, affiliate marketing was one of a whole variety of marketing programs retailers used, and many of them were offline-–radio TV, billboards,” says Gordon Hoffstein, CEO of affiliate marketing services provider Be Free Inc. “But as money became tighter, we found a way to apply traditional marketing metrics online. With many of our newer customers over the past 12 months, we’ve gotten a larger percentage of their marketing budget then we did two years ago when they were spending money all over the place.”
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