INMA_A01.QXD

Some of the issues with balancing spend between affiliate marketing and other online

communications techniques and offline communications techniques are illustrated by

Mini Case Study 8.5 ‘Electronic retailers cut back on their e-communications spend’.

3 ONLINE PARTNERSHIPS

Figure 8.17The affiliate marketing model (note that the tracking software and fee pay-

ment may be managed through an independent affiliate network manager)

Visitor

PC

Visit Affiliate

site

Click Tracking

software

Re-direct Merchant

software

Sale or lead

Creative

Commission fee

Sets time-limited cookie

Checks present on purchase

Technology e-retailer dabs.com (featured in Case Study 7) has traditionally used these as their main

communications tools:


 Search engine marketing (the main investment)


 Referrals from affiliates (this has been reduced)


 Online display advertising on third-party sites (limited)


 PR.

Jonathan Wall, Dabs marketing director, explains how dabs.com reappraised their use of e-commu-

nications tools. He said:

We stopped all our affiliate and price-comparison marketing in February because we wanted to see

what effect it had on our business and if we were getting value for money. It was proving a very expen-

sive channel for us and we've found [stopping] it has had virtually no effect, because we're seeing that

people will still go to Kelkoo to check prices and then come to our site anyway. It's like they're having a

look around first and then coming to a brand they know they can trust. We're continuing with paid-for

search on Google, but that's all we're doing with online marketing at the moment.

New Media Age(2005b) also reported that Empire Direct had adopted a similar approach to its com-

munication mix, reporting that its co-founder and sales and marketing director, Manohar Showan, had

revealed that the company has significantly moved from online to offline advertising. He said:

We’ve moved a lot more into national papers and specialist magazines, two years ago, if you’d asked

me where we marketed and advertised ourselves, I would have said the majority was online. But now

it’s turned right round and online’s the minority.

New Media Age(2005b) believes that the reason for this is not a mistrust of the very medium it's using to

take sales but, instead, the result of a growing realisation that its acquisition costs were swelling online.

Showan says:

Mini Case Study 8.5

Electronic retailers cut back on their

e-communications spend