Case no 1 511 Research Question

How do content providers perceive advantages and disadvantages of affiliate marketing compared to other forms of online advertising?

In the following table, advantages and issues connected with affiliate marketing described in the literature overview are compared with content provider's perception of them.

Table 2 - Case 1: Advantages and issues with affiliate marketing

In accordance with the theory, content provider values affiliate marketing, because it brings him an opportunity how to earn additional income from his websites and easy access to new merchants. However, he considers targetability, which is described in the literature as one of the main advantages of online advertising, questionable. He notes that affiliate marketing can be beneficial, but it is necessary to target it very precisely. Therefore, it is necessary to devote large amount of time to find out the most efficient way of employing affiliate program at a particular website.

Possibilities of extended tracking offered by affiliate marketing are perceived as advantageous, however the content provider sees them only as a minor benefit. Deliverability is not considered as more advantageous than other types of online advertising. However, interactivity is perceived as less beneficial compared to other types of online advertising. As content provider is only paid when a merchant actually succeed to convert a visitor into a customer, he loses control over his visitors' actions after leaving the website and have to rely on merchants' abilities. Therefore, if the merchant's performance is not sufficient, content provider has only very limited options, how to improve it.

Added value, which can affiliate marketing bring to websites, is not perceived as an advantage by the content provider. He considers it as an important factor for selecting the affiliate program, he is going to participate in, but not as a benefit, that would persuade him to prefer affiliate marketing to other forms of online advertising.

Two more advantages, that have not been described in the literature so far, are perceived as very important by the content provider. First, it is the opportunity to make higher revenue than when employing other forms of online advertising. Second, only little overhead costs are connected with administrating affiliate marketing campaigns, which makes its usage even more beneficial.

When the issues connected with affiliate marketing are concerned, the content provider does not think that banner blindness is more challenging in connection with affiliate marketing than in other forms of online advertising.

However, he perceives conversion rate issues as a possible problem that can discourage him from using affiliate marketing at some websites. As was already mentioned above, content provider has only a little control over visitors' actions after leaving his websites and he has limited (or none) possibilities how to influence the merchants' performance. Therefore, he has to assess the conversion rate carefully in order to keep his income and not being harmed by problems at the merchants' side.

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