Online retailers face an expanding universe of online marketing options, including new ad formats in social media and mobile commerce as well as in search marketing. But affiliate marketing nonetheless continues to play an important role in acquiring customers and building sales, an analysis of Top500Guide.com data shows.
Among the 1,000 top e-retailers in North America ranked in the Internet Retailer Top 500 and Second 500, 258 report how many affiliates they work with, including coupon and enthusiast sites, and blogs. The number ranges from one to more than 100,000.
FragranceNet.com Inc., which reports the third-highest number of affiliates at 70,000, says affiliates are an important part of its strategy to grow. “Our affiliates continue to contribute to the overall growth of our company and represent an important part of our marketing strategy,” president Jason Apfel says. “We work with our affiliates to match compelling offers to their audiences. We anticipate this to be an integral part of our business as we move forward.” FragranceNet.com, which uses Rakuten LinkShare to help manage its network of affiliates, is No. 153 in the Top 500.
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Peter Cobb, senior vice president and co-founder of eBags Inc., which has more than 13,500 affiliates, says many affiliates have “become more creative and cultivate strong customer loyalties” as they seek remain relevant in a crowded online marketing industry. “In a challenging environment—in particular with Google search page real estate becoming more monetized—affiliates have held their own and even carved out market share gains,” he says. He calls out Ebates Performance Marketing Inc.’s ebates.com and RetailMeNot Inc.’s RetailMeNot.com as examples of discount marketplace sites that serve as effective affiliates. He also considers Cartera Commerce Inc.’s Cartera.com a useful affiliate site that attracts consumers looking for deals from online merchants and providers of travel and financial services. For affiliate network services, eBags, No. 149 in the Top 500, works with Commission Junction and Rakuten LinkShare.
Some smaller retailers are also putting increased emphasis on affiliate marketing. Ozbo.com, No. 450 in the Top 500, is planning to increase its number of affiliates, with the goal of generating more sales through those sites, co-founder Joshua Wood says. Ozbo, which sells products ranging from groceries and pet supplies to bathroom fixtures and power tools, plans to work harder at reaching out to web sites that offer content about household products, he says.
Wood says sales on Ozbo.com so far this year are running 80% ahead of last year, but that affiliates only account for about 5% of orders. “We’ll do more outreach to ‘mommy bloggers’ and pet enthusiasts, and help them monetize their web traffic,” Wood says.
Meantime, Ozbo has already expanded its number of affiliates to about 1,000, up from 450 last year. It works through the affiliate network service ShareASale.
Among the Top 1000 e-retailers in North America, 48 report ties to 196 or fewer affiliates, and 13 say they use 12,000 or more. But 129, exactly half of the 258 that report their affiliate relationships, fall between 1,000 and 11,000 affiliates. Among the 143 retailers in the Top 500 who reported that they work with at least one affiliate, 71 have between 1,000 and 10,500, including 33 that have between 1,000 and 5,000, and 38 with between 5,000 and 10,500, Top500Guide.com data show.
Among the 115 retailers in the Second 500 that reported that they work with at least one affiliate, 58 have between 1,000 and 11,000 affiliates, including 43 that have between 1,000 and 4,900, and 15 with between 5,000 and 11,000.
At the top of the affiliate count are two retailers that report working with more than 100,000 affiliates. They are “streetwear” apparel merchant Karmaloop and online game retailer Big Fish Games Inc. Karmaloop, No. 118 in the Top 500, reports having150,000, and Big Fish Games, No. 159, tops all Top 1000 e-retailers with 304,000.
Neither Karmaloop, which uses the Rakuten LinkShare affiliate network, nor Big Fish Games, which uses the Google Affiliate Network, immediately returned a request for a comment about their affiliate strategies. However, Karmaloop has noted in the past that its affiliate program plays an important in building its reputation through affiliate “brand evangelists.”
Top Tech 2014 a digital book published by Internet Retailer that lists the leading vendors to the Top 1000 e-retailers, ranks the following as the top 10 affiliate marketing services providers.
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