European Affiliate Marketing Landscape Report · Created by PerformanceIN and in association with Webgains; the second annual European affiliate landscape survey includes input from

Created by PerformanceIN and in association with Webgains; the second annual European affiliate landscape survey includes input from over 900 European affiliates.

[ European Affiliate MarketingLandscape Report 2012 ]

European Affiliate Marketing Landscape Report 2012 In Association with Webgains

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Contents Foreword ................................................................................................................................................. 4

Landscape Report 2012 Highlights.......................................................................................................... 5

European Demographic Data, Geographies and Affiliate Information ................................................... 7

Figure 1: Gender ................................................................................................................................. 7

Figure 2: Age ....................................................................................................................................... 7

Figure 3: When Did You Start Work In Affiliate Marketing? ............................................................... 8

Figure 4: Which Of The Following Best Describes You? ...................................................................... 8

Figure 5: Including You, How Many Employees Work In Your Affiliate Business? ............................. 8

Figure 6: Have You Been Financially Funded In Any Way? ................................................................. 9

Figure 7: In Which Country Is Your Primary Operation? ..................................................................... 9

Figure 8: Which Territories Are You Planning To Expand Into During 2012? (43% are planning to

expand) ............................................................................................................................................. 10

Figure 9: Which Verticals Do You Work In With Your Affiliate Activity? .......................................... 11

Figure 10: What Is Your Preferred Payment Model? ........................................................................ 11

Figure 11: How Would You Rate These Issues In Order Of Importance Within The Country You

Conduct The Largest Amount Of Business? ...................................................................................... 12

Figure 12: On Average, How Much Commission Do You Earn Per Month? ...................................... 12

Figure 13: What Percentage Of Your Overall Company Turnover Is Attributed To Performance

Marketing? ........................................................................................................................................ 13

Figure 14: Which Affiliate Models Do You Work With? .................................................................... 14

Figure 15: How Important To Your Earnings Is Contextual Advertising? (i.e Adsense) .................... 14

Figure 16:How Do You Generate The Majority Of Traffic To Your Website? ................................... 14

Figure 17: Have You Used Pay Per Call?............................................................................................ 15

Figure 18: Which Is Your Preferred Network You Currently Work With? ........................................ 16

Figure 19: Which 5 Of These Are Most Important To You When Working With An Advertiser /

Merchant? ......................................................................................................................................... 16

Figure 20: Which 5 Attributes Would Encourage You To Work More Closely With An Advertiser? 17

Figure 21: How Would You Rate The Quality Of The E-mails You Receive From Agencies,

Advertisers and Networks? ............................................................................................................... 17

How can a Network / Advertiser / Agency improve their relationship with you? ........................... 17

Figure 22: Do You Think Your Commissions Earned In 2012 Will Be More Or Less Than In 2011? .. 18



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Figure 23: What Do You Expect To Be The Biggest Threat To Your Earnings This Year? .................. 19

Figure 24: How Positive Are You Regarding The Future Of Your Performance-Related Activity

Within Your Business? ...................................................................................................................... 20

Why? ................................................................................................................................................. 20

Figure 25: Have You Taken Any Steps To Conform To The EU Privacy Directive? ............................ 21

If No, Why Not?................................................................................................................................. 22



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Foreword It does not seem like a year since we launched the inaugural pan-European

affiliate survey; partly because, as I suspect, we are all busy aligning our

resources to the incredible growth we have seen in the affiliate marketing

industry over the past decade. However, a whole year it has been, and the

exciting thing about this year’s survey is that we now have data to

compare with last year’s survey and see how things have changed in

twelve months. Two survey’s data certainly does not give us the full

picture, but does allow us to start reflecting on potential trends and the

direction things are moving.

The logic for carrying out the survey is indisputable. Our industry has

reached a size and a level of maturity that makes understanding the key drivers imperative and no-

one underestimates the importance of the vital services affiliates perform. Only by such detailed

data collection and analysis can we plan our businesses to respond properly to any identified issues.

We need to be able to structure our organisations to deliver what the market requires now and in

the future in order to ensure the growth continues. A detailed understanding of the nature,

composition, promotional techniques and concerns of affiliates, both in their home markets, and

across the whole of Europe is absolutely essential.

The survey this year was filled out by over 900 affiliates in 40 countries. Questions from the first

part of the survey were aimed at discovering the key characteristics of active affiliates (gender, age,

company size, earnings etc). Who exactly are these people at the heart of our industry? The survey

also examines how international our European affiliates really are; and how much cross-border

promotion takes place.

Understanding how affiliates choose to promote our merchants is an essential part of the puzzle,

and the survey examines in depth the tools, techniques and promotional biases employed. The

differences (and similarities) between countries paint a fascinating picture.

Of particular value are the views expressed by the affiliates on how our industry is evolving and how

they see the future unfolding. Do affiliates see earnings rising or falling? Where are the threats to

earnings? Which countries are optimistic and which are less so?

I sincerely hope you enjoy reading and absorbing the results of this survey, and I want to take the

opportunity to thank the affiliates who gave of their time to contribute to this most important piece

of analysis. I would also like to thank the team at PerformanceIN.com and Chris Johnson in

particular for writing and undertaking the survey, compiling the data, completing the analysis and

finally writing this report. I am sure you will find it compelling reading and a useful tool in planning

your business going forward.

Managing Director, Webgains

http://www.webgains.com/



Page 5

Landscape Report 2012 Highlights

- As much as 55% of European Affiliates really heavily on Search Engine Optimisation to

generate traffic to their website. Still a high amount but the figure is down from 65% in

2011 as affiliates explore new avenues to generate traffic. Social Media (13%) and Paid

Search (12.7%) have increased in popularity compared to 2011 figures of 8% and 10%

respectively.

- Content-driven Affiliates are on the decrease across Europe, when compared to 2011’s

figures (figure 14) which was down 5% year-on-year.

- Affiliate companies are expanding throughout Europe. Results show a decrease in affiliate

businesses with 1-4 employees and an increase in businesses with 10-19 and 20-29

employees respectively.

- The biggest threat to Affiliate Earnings is still ‘Google Updates / Slaps’, however this figure is

down 5% on last years’ results.

- Of Affiliate Window’s 15% share of votes as preferred network, 25% of votes came from

affiliates based in European countries outside of the UK, despite not having a European

operation in place.

- The voucher affiliate model continues to grow despite an increasing saturation across the

market, up 4% year-on-year.

- 43% of European affiliates are planning to expand internationally over the course of 2012,

with the United States, United Kingdom, Spain, Germany and France being the most popular

countries for planned expansion.

- The tightening of consumers’ purse strings can be seen in the big-earning respondents with

all monthly commission-earning brackets (figure 12) over €500 dipping slightly.



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- The proliferation of the voucher model continues (figure 14) with a rise in its usage by

respondents. These figures will doubtless fuel debate that how this model is developed will

likely shape the future of the industry over the next few years.

- Social media’s standing in the spectrum of digital marketing is climbing, a fact that’s

probably in line with the heightening piles of investment cash being shovelled into services

such as Facebook and Pinterest.

- Bizarrely - even after months and months of headlines - nearly half of all respondents have

yet to take steps towards conforming to the E-Privacy Directive (figure 22).



Page 7

European Demographic Data, Geographies and Affiliate Information

Figure 1: Gender

Figure 2: Age

73%

27%

Male

Female

83%

17%

2011 Values

Male

Female

Male

Female

Under 18 18-24 25-34 35-54 55-64 65+

2012

2011

Under 18 18-24 25-34 35-54 55-64 Over 65

UK

France

Germany

Spain



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Figure 3: When Did You Start Work In Affiliate Marketing?

Figure 4: Which Of The Following Best Describes You?

Figure 5: Including You, How Many Employees Work In Your Affiliate Business?

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

2012

2011

50.70%

26.70%

22.60% I own a registered affiliate

company

I work for an affiliate company

I do my affiliate activity part-time

1-4 5-9 10-19 20-49 50-99 100-499 500-999 1000+

2012

2011

1-4 5-9 10-19 20-49 50-99 100-499 500-1000 1000+

UK

France

Germany

Spain



Page 9

Figure 6: Have You Been Financially Funded In Any Way?

Figure 7: In Which Country Is Your Primary Operation?

Other Countries Specified:

9.80%

90.20%

Yes

No

11.61%

88.17%

2011 Values

Yes

No

2012

2011

Females working with the industry have jumped by 10% compared to our figures in 2011.

Germany has the largest number of female-to-male ratio, followed closely by the United

Kingdom.

Results show a decrease in affiliate businesses with 1-4 employees and an increase in

businesses with 10-19 and 20-29 employees respectively.



Page 10

Figure 8: Which Territories Are You Planning To Expand Into During 2012? (43% are planning to expand)

Austr

ia

Belg

ium

Denm

ark

Fin

land

Fra

nce

Germ

any

Gre

ece

Italy

Neth

erl

and

s

Norw

ay

Pola

nd

Port

ugal

RO

I

Spain

Sw

eden

Sw

itzerl

and

Turk

ey

UK

USA

Oth

er

2012

2011

UK France Germany Spain



Page 11

Figure 9: Which Verticals Do You Work In With Your Affiliate Activity?

Figure 10: What Is Your Preferred Payment Model?

Broadband & Internet Services Casino, Bingo & Gaming

Fashion Finance

Mobile Online dating

Retail Travel & Leisure

Other

CPA (Cost Per Acquisition) CPC (Cost Per Click)

CPM (Cost Per Mille) Hybrid / Tenancy

Revenue Share Other

Broadband Fashion Casino,

bingo &

gaming

Finance Mobile Online

dating

Retail Travel &

leisure

Other


CPA CPC CPM Hybrid/tenacy Revenue share Other


For those providing services in the casino & gaming sector, it was once considered a gold rush. Since

the various US lawsuits that have hit service providers, though, interest in the sector has waned. Proof

of this can be seen in the performance space where casino, bingo and gaming plays second fiddle to

nearly all other sectors in Europe’s four biggest regions (figure 9).



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Figure 11: How Would You Rate These Issues In Order Of Importance Within The Country You Conduct The Largest Amount Of Business?

Figure 12: On Average, How Much Commission Do You Earn Per Month?

2012

2011

The tightening of consumers’ purse strings can be seen in the big-earning respondents with

all monthly commission-earning brackets (figure 12) over €500 dipping slightly from 2011.



Page 13

Figure 13: What Percentage Of Your Overall Company Turnover Is Attributed To Performance Marketing?


2012

2011



Page 14

Figure 14: Which Affiliate Models Do You Work With?

Figure 15: How Important To Your Earnings Is Contextual Advertising? (i.e Adsense)

Figure 16:How Do You Generate The Majority Of Traffic To Your Website?

2012

2011

21.20%

3.50%

25.10% 27.30%

23%

Don't Use Contextual Advertising Not Very Important

Semi-Important Important

Very Important

Co-Reg CPL Lead

Gen

Paid

Search

SEO Social

Media

Other

2012

2011

As much as 55% of European Affiliates rely heavily on Search Engine Optimisation to

generate traffic to their website (figure 16) This is still a high amount but the figure is down

from 65% in 2011 as affiliates explore new avenues to generate traffic. Social Media (13%)

and Paid Search (12.7%) have increased in popularity compared to 2011 figures of 8% and

10% respectively.

The proliferation of the voucher model continues (figure 14) with a rise in its usage by

respondents. These figures will doubtless fuel debate that the model will soon hit its ceiling.



Page 15

Figure 17: Have You Used Pay Per Call?

UK

France

Germany

Spain

11.70%

88.30%

Yes

No

9.00%

91.00%

Yes

No

Usage of pay per call (figure 17) services has seen a gradual upturn even with the lack of

local offerings in Europe. Companies such as AdInsight, Ring Revenue and Freespee will

likely spur the technology to new strengths over the coming year.

The proliferation of the voucher model continues (figure 14) with a rise in its usage by

respondents. These figures will doubtless fuel debate that the model will soon hit its ceiling.



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Figure 18: Which Is Your Preferred Network You Currently Work With?

Figure 19: Which 5 Of These Are Most Important To You When Working With An Advertiser / Merchant?

Affiliate Window

15% Affiliate Future

2%

Affilinet

8%

Commission

Junction

7%

Paid on Results

2% TradeDoubler

15%

Webgains

17%

Zanox

12%

LinkShare

3%

Google Affiliate

Network

2%

Other

13%

Webgains, Tradedoubler and Affiliate Window head up the list of preferred networks in this year’s list, with Webgains replacing Tradedoubler as most preferred for 2012 EU-Wide. New to the UK, Google Affiliate Network hasn’t been resting on the laurels it built in the USA. In the two months since its official UK launch, the network has mustered a 2% market share (figure 18). The next 12 months for Google Affiliate Network will be of great interest to performance industry onlookers.



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Figure 20: Which 5 Attributes Would Encourage You To Work More Closely With An Advertiser?

Figure 21: How Would You Rate The Quality Of The E-mails You Receive From Agencies, Advertisers and Networks?

How can a Network / Advertiser / Agency improve their relationship with you? “Better reporting tools so that we can provide more accurate data to our users.”

“Provide deeplinks to the offers they want affiliates to promote. I still see Voucher Codes released without me receiving an email and sometimes without a ready-made link.”

“Making account managers more accessible.”

“By bringing on more big-brand advertisers.”

“More support, advice and tips on how to turn traffic into sales.”

“Transparency on all levels from engagement to profit.”

4.20%

18.40%

46%

27.60%

3.80%

Very poor Poor Neutral Good Very good



Page 18

“By offering more technology solutions that can help manipulate the volumes of data we have access to.”

“By having a website that is easy to understand and use for beginners, including a clear explanation of all terms (acronyms).”

“Maintaining three-way meetings between the advertiser, the network itself and the affiliate.”

“Giving me access to stats on the go. A mobile version / app would suffice!”

“By respecting their payment terms!” “By working with us as introducers of business, not minions.”

“Transparency on deals, codes, and re-activity” “More transparency in the validation of sales.”

Figure 22: Do You Think Your Commissions Earned In 2012 Will Be More Or Less Than In 2011?

2012 2011




Page 19

Figure 23: What Do You Expect To Be The Biggest Threat To Your Earnings This Year?

2012

2011

UK

France

Germany

Spain



Page 20

Figure 24: How Positive Are You Regarding The Future Of Your Performance-Related Activity Within Your Business?

Why? Positive - “I’m only scratching the surface of what’s possible so I’m confident that with a little work my affiliate earnings will increase.”

Positive - “We still have a margin large enough to evolve throughout the course of this year.”

Negative – “The effort becomes too large relative to Neutral – “Difficulty in increasing organic

22.30%

48.60%

25.30%

3% 0.60%

Very positive Positive Neutral

Negative Very negative

19.12%

41.77%

35.75% 3% 0.71%

Very positive Positive Neutral

Negative Very negative

Very positive Positive Neutral Negative Very negative

Spain

Germany

France

UK

Google updates and slaps are going concerns for UK survey participants, more so than any other country (figure 23). France’s big fear is the culling of affiliates on programmes (figure 23).



Page 21

my earnings.”

traffic.”

Very Positive – “Many advertisers and bigger companies are only just getting started.”

Very Positive – “Increasingly people are processing more and more online. This is only good news for us.”

Positive – “Because Advertisers will always depend on the support of other marketing channels.”

Neutral – “It is difficult to predict the future in a rapidly changing environment.”

Negative – “Frequent Google updates and never-ending internet-related legislation worldwide.”

Very Negative - “With more big companies entering the space causes us problems.”

Figure 25: Have You Taken Any Steps To Conform To The EU Privacy Directive?

57.60%

42.40%

Yes

No

0

20

40

60

80


Yes

No

Interestingly more respondents are positive about the future of their performance-related activity

(figure 21) that not. The Spanish seem the most cynical of the larger four countries.

Compared to 2011’s figures, more respondents were either ‘very positive’ or ‘positive’ regarding the

future of their Performance Marketing Activity.



Page 22

If No, Why Not? “Haven’t got to grips with it yet. Need to analyse site.”

“I want to see how bigger players deal with it.”

“Fear it will reduce traffic” “I don’t think they will take anybody to court, and eventually it will be dropped.”

“Awaiting more precise information” “I did not know about this – but will look into it now!”

“Lack of information” “Ignorance” “We are not aware of it” “Because it is not clear, it’s an ambiguous law.”

Bizarrely - even after months and months of headlines - nearly half of all respondents have yet

to take steps towards conforming to the E-Privacy Directive (figure 22).

Documents

European Affiliate Marketing Landscape Report · Created by PerformanceIN and in association with Webgains; the second annual European affiliate landscape survey includes input from