R.O.EYE Blog

By Chris Worthy, Senior Programme Executive

Anyone who has read a paper or watched the news over the past couple of months would be forgiven to think that the UK is on the brink of economic collapse. Recent reports supporting claims like unemployment is rising at the fastest rate since 1992 as companies cut back their staff in light of rising costs. Inflation is set to hit a new high with it highest increase of 10% since 1986, and don’t forget we are in the midst of a ‘credit crunch’. All this then sums up what looks like a grim prospect for the economy, consumer spending, marketing budgets and advertising. Therefore should affiliate marketing be worried about the uncertainty ahead and the effects it will have on its growth?

Let’s start with Google. In a press release on Friday it was announced that shares in the giant fell 9.4%, worrying news you may think until you read further to discover that Google’s profits rose 35% in the second quarter. Google may not be showing the expediential growth it once did, but it along with online marketing is still expanding at a rate of about 30%. To put this into context media giant Group M predicts that in 2008 TV, Press and Radio will see a decrease in marketing spend as companies switch budget to online channels.

The switch of budget to online channels is of no surprise when you look at the recent consumer internet spend figures. Despite the ‘credit crunch’ internet spend was up 38% on the same period last year according to the group IMRG. Customers are fleeing the streets and heading online to find the cheapest bargains. Retails spend may be going down on the high street but it is going straight back into the online retailers.

So do fears of a recession and the grip of the ‘credit crunch’ pose a risk to affiliate marketing? If the recent figures are to be believed then it appears not. Indeed quite the opposite effect may be seen especially amongst certain genres of affiliate. As customers go in search of cheap prices and discounts, affiliate cash back sites, voucher code sites and price comparison sites could see a boost, especially as the public are becoming increasingly savvy to such sites. Retail may be in for a tough time over the next few years but this will be the time for online and affiliate marketing to show how diverse and resilient it is.

This entry was posted on Monday, July 21st, 2008 at 5:23 pm and is filed under Affiliate Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.