• It has been estimated that the Indian e-commerce industry has grown from $ 3.8 billion in 2009 to $ 12.6 billion in 2013. The Indian e-commerce consumer base is also expected grow to 100 million people in 2016 from 35 million in 2014, as per Google’s Annual Online Shopping Growth Trends Report in collaboration with Forrester Research. With e-commerce creating such a furore in the Indian market, affiliate marketing may well prove to be the game changer for online businesses and brands. Trends in digital marketing
    ▪    As per the CMO Council India report here, digital ad spend in India is expected to grow by 35% over the Rs. 3,042 Crore (US$ 507.41 million), which is the sum spent on the same in 2013.
    ▪    From the infographic above, it is apparent that the maximum percentage change or proportionate increase over the years has been in digital ad spend, from 28% in 2012 to 30% in 2013 to an estimated 35% in 2014.
    ▪    Besides e-commerce portals such as Flipkart, Amazon, Snapdeal and the likes which have affiliate programs, a perusal of the segment wise constituents of digital ad spend shows that FMCG and retail lead the game.
    ▪    Online advertising is not simply one of the ways of advertising – it has become THE way to advertise and reach / inform consumers. Business Today here reports how certain brands (Revlon) used digital media to look contemporary and reach its target audience – women described as ‘digital natives’.
    ▪    StartupWorld.com has reported that as per a survey, 95% buyers admitted to having searched for deals online, and 74% of such buyers took advantage of couponing sites for the most economically efficient purchases.
    ▪    IBEF reports that the online advertising market in India will increase by 30 % from Rs. 2,750 crore (US $ 444.72 million) in March 2014 to Rs. 3,575 crore (578.13 million) by March 2015, as per a joint study by the IAMAI and IMRB International.

    Scope of Affiliate Marketing

    Briefly, the infographic above shows that a large portion of the traffic experienced by online business portals is attributable to affiliate marketing. Let’s try and understand why this is, and what the scope of affiliate marketing is for brands.

    ▪    The RoI is measurable, as compared to traditional advertising such as newsprint and television etc. The commission to be paid on every sale is fixed, and the payment needs be rolled out only on a successful consumer conversion, making affiliate marketing a win-win for brands.
    ▪    The cost of consumer acquisition is very low compared to other modes of advertising used for consumer acquisition and lead generation, rendering it attractive to online businesses.
    ▪    Not only this, the returns on affiliate marketing endeavours are way higher than run-of-the-mill digital marketing campaigns, especially keeping in mind the reduced investment.
    ▪    Affiliate marketing boosts the process of building a brand. Traffic experienced by brands and e-commerce businesses is unprecedented, and the excitement of sale/ coupons etc. adds momentously to the same.
    ▪    The purchasing tendencies of consumers and their inclinations are made abundantly clear to online portals and brands, thanks to the ‘measurable’ facet of affiliate marketing. Analysing and understanding what drives consumers to buy, and what they buy, is crucial for the long term well-being of any enterprise.

    With top e-commerce companies which used to spend a miserly Rs. 10-12 lakh each year, now spending anywhere between Rs. 25-75 Crore, it is evident that companies and brands which desire a strong online presence and a longer shelf life have comprehended the path they need to follow (as reported by ET here). With its many advantages and vast scope for e-businesses, affiliate marketing is quite rightly the rage in the nation.

About the Author:  Ravitej is the CEO and Founder of Pennyful. In 2009, Ravitej graduated with a degree in Electronics & Communications Engineering from RVCE (R.V. College of Engineering in Bangalore).  In 2010, he launched Pennyful which has become a leading innovator in cash back shopping in the U.S.  Part of wholly-owned subsidiary, Eze Get Online, Inc. (Wilmington, DE), Pennyful(.)in pays its customers to shop on-line. Currently Pennyful has more than 1500 partner stores (from Sony to Macy’s; Adidas to Fandango). The success of Pennyful(.)com in the U.S. lead to the launch, in 2011, of Pennyful(.)in, which today is India’s Largest Cashback website and has over 250 of the top merchant partners in India. Being a serial entrepreneur, Ravitej decided to launch MediRupee(.)com in 2013 with co-Founder, Manu Swarup. As a sports enthusiast, Ravitej plays cricket, tennis and volleyball and, believing in the importance of helping those communities in which he does business, he frequently donates his time and resources to those in need. He has been part of the judging committees at various events held by graduate schools in Bangalore and was featured on CNBC-TV18’s “Young Turks” in 2011 as part of the E-Summit.

By Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com.

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