June 16, 2008

JupiterResearch Finds That Online Affiliate Marketing Spending Will Continue to Grow, Reaching $3.3 Billion in 2012

JupiterResearch, a leading authority on the impact of the Internet and emerging consumer technologies on business, has found that affiliate marketing continues to play a key role in online marketers' ability to reach and acquire customers. In 2008, online marketers will spend $2.1 billion on affiliate marketing fees, with US online affiliate marketing spending reaching $3.3 billion in 2012, as indicated in a new report US Online Affiliate Marketing Forecast, 2007-2012, published by JupiterResearch.

According to the report, affiliate marketing remains a highly attractive endeavor because it is performance based, presenting low risk and requiring low initial investment. Over time, marketers tend to work with affiliates that drive the most traffic to their sites, resulting in a small number of affiliates driving the majority of traffic and sales.

Because affiliate marketing is so heavily intertwined with the search engine marketing industry, Google is the one wild card that might affect the overall growth of the industry. Google's dominance over SEM forces affiliates to be sensitive to Google's Quality Score, which prevents lower-quality affiliates from buying paid search.

"Strong affiliates that have quality content and responsible marketing practices succeed within the changing search environment and reap the benefits of a growing ad arena," explained Patti Freeman Evans, Online Retail Analyst and lead author of the report for JupiterResearch.

According to David Schatsky, President of JupiterResearch, "To date, an alternate way to generate traffic from search has not materialized. However, the development of niche outlets such as blogs and social networking sites does provide balance to the consolidation of top affiliates."

The complete findings of this report are immediately available to JupiterResearch clients online at www.jupiterresearch.com. For details on JupiterResearch's methodology, visit www.jupiterresearch.com/bin/item.pl/methodology or email [email protected] to request a detailed methodology statement. For additional information on this report or JupiterResearch's Online Marketing research service, visit www.jupiterresearch.com or contact Kieran Kelly, Senior Vice President of Global Sales and Client Service, at 1-800-481-1212 or [email protected]

Analyst Weblog: Patti Freeman Evans

Related Reports: Search Arbitrage and Affiliate Marketing, Search Marketing and Analytics, Incentive Marketing

About JupiterResearch

JupiterResearch provides unbiased research, analysis and advice, backed by proprietary data, to help companies profit from the impact of the Internet and emerging consumer technologies on their business. The company helps online businesses make critical decisions about technology selection, spending, staffing, and Web site effectiveness; advises consumer-facing companies with online advertising, marketing, and customer service strategies to understand, attract, convert and retain customers; and guides technology vendors and service providers on market opportunity, positioning, product definition, and pricing. JupiterResearch is headquartered in New York City and has offices throughout the US and Europe. For more information, visit www.jupiterresearch.com.