Affiliate Commissions $6.5 Billion - SEM $5.75 Billion

[5starAffiliatePrograms]

A report by Marketing Sherpa estimates affiliate commission payouts in 2006 will reach $6.5 billion. In the US advertisers spent $5.75 billion on search engine marketing in 2005, according to a report released Monday by the Search Engine Marketing Professional Organization (SEMPO). Not sure what the projections are for search marketing in 2006 but if these numbers are accurate it just goes to show you how big a part the affiliate marketing sector plays in the overall online marketing game.

Anne Holland, the Publisher over at Marketing Sherpa did a great overview of Affiliate Summit which included this projection about affiliate commissions for 2006 as well as reviewing the following topics that were covered at the Summit: Search marketing & affiliates, blogs - two best tactics for marketers and managers, staffing - hiring a good affiliate manager and how the affiliate networks are competing. She also includes the slides from the keynote presentation on the page below.

MarketingSherpa.com Affiliate Summit 2006 Wrap-Up Report - Commissions to Reach $6.5 Billion in 2006
http://www.marketingsherpa.com/sample.cfm?contentID=3157

Now that we have more data, MarketingSherpa's research team roughly estimates affiliates worldwide will earn $6.5 billion in bounty and commissions in 2006. This includes retail, personal finance, gaming and gambling, travel, telecom, 'Net marketing' education offers, subscription sites, and other lead generation, but it does not include contextual ad networks such as Google AdSense.
What do you think?
Linda

[Chris Boggs]

Pretty darn good vote for Affiliate marketing is what I think. Not to mention that the SEM # is somewhat skewed because it includes the funds actually spent at the portals (AdWords, etc...). The money earned by SEM's for that work might equate to 15-25% of the $5.75B? How much of the remainder is earned by sites hosting AdSense or YPN? Still far less than $6.5B I imagine...

So does this mean that traffic from affiliate links is more valuable than SEM-driven traffic? I would like to see some conversion rate comparisons before determining that...

[danay]

what about the SEM driven traffic that comes in from affiliates? IMHO there are so many affiliates out there that smoke the actual merchants when it comes to bringing in qualified sem traffic.

[5starAffiliatePrograms]

Really good point Danay! Lots of affiliates are better at SEM than the merchants they promote and many affiliates invest in PPC. So some of that SEM money is actually still due to affiliate marketing.

Linda

[critter]

Thats some impressive figures!

Does anyone have any stats on the breakdown on this 6.5 Billion?

Which industries contributed most to that figure?

Cheers

Critter

[danay]

You can purchase the full report for $5 by following this link:
http://www.marketingsherpa.com/barrier.cfm?currentID=3157

Anne Holland and her team at MarketingSherpa are an outstanding resource for our industry. I plan on purchasing the report when I get into the office, so I will let you know the details after I read it.

Linda did you read it and do you have any insight?