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Revolution, in association with Affiliate Window, invited a select group of industry figures for the third in a series of roundtable discussions on affiliate marketing. Conversation was geared towards looking towards the future - what can the sector expect to see in terms of technology evolution, integration within the marketing mix and relationships with publishers, merchants and agencies?

Everyone at the table agrees that affiliate marketing has come a long way since even two years ago. Mark Kuhillow, managing director of Ro-Eye, opens the discussion by saying that the amount of money pouring in the industry has helped affiliate marketing to mature. "It's no longer the young child of the internet - it's growing up."

Anthony Clements, manager of the key accounts team at Affiliate Window, agrees. "Key brands that we work with have changed massively, even in the past year," he says. "And, not only that, but the way the brands want to set up their affiliate programmes has changed compared with 18 months ago. It's quite a short time but in affiliate marketing it's massive. The way programmes are put together today is far stricter these days and incremental revenue is the sole aim, where it probably wasn't 18 months ago. Well, they did want the revenue, but they just didn't know how to achieve it."

Oliver Adler, PPC director at TrafficBroker, thinks that client mentality is helping to propel the affiliate market forward. "They know much more about what they want - whereas before they had vague ideas about 'let's do some business online', now the whole working environment has changed - a focus on generating business for the merchants with a focus on key words, but then also in the respect of affiliates and agencies. Both organisations want to work for the same merchant, so communication is required between them, but it's not always very easy. Now agencies, merchants and affiliates talk so much more."

Openness

The growing communications that Adler speaks of are due to openness between the parties leading to more trust. "The level of transparency makes it much easier now," says Paul Nikkel, co-founder of cash-back web site Quidco, which charges its customers £5 a year to give them commission back on their affiliate-driven purchases.

"One of the most significant changes is how professional agencies have become about affiliate - when I used to speak to agencies, they'd just throw money at affiliate marketing if they had any left over, and it'd just be one person and not a dedicated team," says Kevin Edwards, head of affiliate channel at Affiliate Window. "Agencies are building up teams now and that's a relatively new phenomenon. This is pushing the networks on to be different, and provide a differentiator. In that sense it's very positive," he adds.

Nicola Marshall, associate director at MVI Manchester, says she has noted the sea change in a personal way. "A year ago, I went to an event and, because I was from an agency, nobody wanted to talk to me. The same affiliates now say: 'Thank God - you run our programme.'"

Peter Banham, head of affiliate at Steak Media, puts the tensions in the industry down to issues of control, saying that that in the past it was a Wild West where anyone could bid on a brand, sometimes without even being noticed. "Maybe you'd realise and you'd have to find out who it was and you might not get an answer. But today, if everyone is clued up, it should mean that affiliates can work closer with key partners because there's lot of competition in the PPC market, which drives up costs for everyone in the end," he says.

"A lot of it is about control and a lack of understanding about how it worked. I've seen so many programmes where they've said: 'No bidding on PPC', but when you look it's still going on, the difference is that they don't know where their traffic is going to go. If we're managing someone's PPC campaign as well as their affiliates, then we can actually work with the affiliate to protect the brand rather than just have a free for all," says Banham.

Meanwhile, Jessica Luthi, a consultant at Affiliate Program Advice, thinks technology has helped to promote transparency in the industry, leading to more trust. "We evolved in the past two years in terms of tracking and the way that marketing departments work."

Regulation

However, she insists that the affiliate industry is still in need of standardisation. "There is no blue print about how to run an affiliate programme - nothing is written down. What we're seeing is different companies, big and small brands, that go from being extremely restrictive with regards to PPC and brand-bidding to being too generous with how they're controlling affiliates," she says. "There's room for improvement - there needs to be guidelines that merchants, affiliates and publishers can tap into. And it's got to come from the affiliates networks because they're the point of contact - they sit in the middle."

Clements from Affiliate Window agrees, but only to a certain extent. "We have to be sensitive to the needs of the merchants. Although I appreciate our responsibility, we have to work together to make sure it is right for everybody."

Nikkel argues that the affiliates can't really be in charge of the regulation. "I don't think that's going to add value to that merchant at the end of the day for us to refuse programmes - there is a grey area where the network is sitting in-between and not necessarily always taking responsibility for the end actions and that comes down to the question of regulation.

"I think that there is a line where there needs to be some regulation yet, the merchants should still be able to say: 'We don't want to run a programme like this', or the agency should have the choice to say: 'We want to try it like this', so that's an area that is going to be hashed out," he explains.

Clements adds: 'We're trying to regulate bidding on brand as much as we can and we're putting the tools in place to do that and restrict other areas where our merchants may not see it adding value, such as spyware. At the end of the day, they are looking for returns - and educating advertisers in how they get them is key."

Integration

Clements is keen to state that the affiliate channel has become much more integrated into the merchant's marketing mix. "As a network, it's important that we can get our affiliate programme to integrate with a multi-channel strategy. It's not going to work if out if a programme comes along and starts tracking all the sales that their search brings in. It's going to muddy your name. Brands are becoming much more demanding "

Overall, the group agrees that the affiliate channel has come a long way in just one year - now with tighter monitoring and a secure place at the marketing table. Banham says that the evolution of social networks will be crucial to affiliate's ascension. "You see some huge networks out there that no one seems to be able to monetise ..." he trails off. Nikkel finishes his sentence, adding: "The CPA model gives a lot of flexibility that you can't do with other forms of marketing; it has enabled a whole new sector of industry - lots of forms."

Edwards agrees that social networks offer massive opportunities for co-sponsorship, application development and CPA deals. "The potential is bespoke and huge - the very complexities of affiliate are also its opportunities. With CPA, you can build apps based on interests - where it's not banner ads or intrusive. And that's something you can't do with the traditional model."

Kuhillow rounds the conversation up with the truest statement of the day: "Affiliate marketing is no longer a 'Wild West', it's a sector they can no longer ignore."

- Kevin Edwards, Head of affiliate, Affiliate Window
- Jessica Luthi, Consultant, Affiliate Program Advice
- Mark Kuhillow, Managing director, Ro-Eye
- Nicola Marsh, Associate director, MVI Manchester
- Anthony Clements, Accounts manager, Affiliate Window
- Peter Banham, Affiliate head, Steak Media
- Peter Owens, Head of account development, AW
- Oliver Adler, PPC director, TrafficBroker
- Paul Nikkel, Founder, Quidco