Report Sees 3 Affiliate Models Emerging
A new report from (www.forrester.com) Forrester Research Inc. foresees shifts in affiliate programs, with e-retailers and their media partners sharing ownership of traffic, revenue, merchandising, and content to drive sales and increase brand awareness. Affiliate programs will evolve from one-size-fits-all links to one of three models: syndicated boutiques, commerce networks or elastic retailers, the firm says.
"Commerce and content companies need each other more than ever," said Jim Nail, senior analyst in new media research at Forrester, which is based in Cambridge, Mass. "Today's popular affiliate program structure will be replaced by what Forrester calls cooperative e-commerce, designed to satisfy increasing consumer demands for self-service, diversify revenue streams, and offer a shopping experience that will engender loyalty."
Forrester says syndicated boutiques will replace simple links at small content sites, which represent the majority of affiliates today. These pop-up microstores will use automated merchandising and store-building tools to offer a small range of carefully selected, branded products that visitors can purchase without leaving the content that prompted them to click through. Small niche sites will be able to convert customers on the spot through affiliation with brand names and intercept new customers who elude advertising by offering bonuses to first-time buyers, the firm says.
In commerce networks, top media and merchant sites will create new buying opportunities by combining exclusive content with relevant product offers. When an article generates interest, commerce networks will deliver a one-click buying experience from a known and trusted merchant. Forrester notes that consumers value the efficiency of researching and purchasing in one session--and increased consumer loyalty goes to the bottom line for e-retailers and boosts the deal structure for content owners.
Through elastic retailing, merchants that target similar customer bases and offer complementary product lines form partnerships the way commerce networks link strong content to commerce. Retailers with complementary businesses will work together to meet customers' needs for advice, recommendations, and products--a process that extends their reach into adjacent categories, Forrester says. These affiliate relationships will allow retailers to better target their customers and integrate marketing and fulfillment. In sharing the cost of merchandising, retailers stand to spend less per customer without changing their vertical economies of scale, the firm adds.
"Retailers need to have a plan in place once cooperative affiliation starts," says Nail. "Merchants must define their audience, identify their dream team list, and turn business development loose to sign deals."
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