It is estimated that UK on-line retail spending will increase to around £30bn for 2006; £2.16bn of this will be delivered via the affiliate channel.

Affiliate marketing is now an essential part of your on-line marketing mix. If you are using traditional media to drive on-line traffic, no matter how sophisticated your PPC strategy or SEO, there is a need to develop an affiliate proposition if only from an investment protection perspective. By correctly leveraging the affiliate marketing community, you can reduce leakage from your above-the-line activity to your competitors.

Affiliate marketing can also help you protect both your online brand and market share from your competitors, by multiplying the effect of your own direct PPC or SEO activity.

Like other online channels, affiliate marketing offers accountability, transparency and control.

Why should you use an affiliate management specialist?

Most affiliates are registered with at least one network, whilst over 60% are working with around three or more. So there are distinct advantages in merchants dealing with more than one network.

However, merchants invariably find that managing the relationship with more than one or two networks difficult and cumbersome and leveraging the commercial muscle of the entire affiliate space is often far beyond their resource. So they look to the affiliate networks to support them.

There are an estimated 50,000-plus affiliates operating in the UK today, operating over 2,500 programmes on behalf of about 1,700 merchants, through around 20 major networks. This means that the average network administers around 170 programmes from about 150 merchants. These 20 networks employ around 600 staff between them, of whom around 2% at best are engaged in account management activity (source: e-consultancy). This resource allocation means that each account manager is on average dealing with upwards of 12 programmes. So when it comes to being able to deliver best-in-class strategic development to each programme, they are perhaps a little under-resourced. This is where a third party management solution can provide the strategic and structural resource to leverage the entire affiliate space.

In some of the more mature affiliate sectors such as mobile or financial services, over 20% of the volume is driven by a very small number of super-affiliates that require special management and support in order to gain the best from them. But no matter what sector your business, if you are using affiliate marketing, your programme could benefit from the strategic and administrative support of a specialist in its development.