A report carried out by PwC on behalf of the Internet Advertising Bureau (UK), which claimed that UK businesses generated £9 billion in sales from online performance marketing (OPM) activities such as affiliate marketing and leading generation in 2012.
IAB’s first study in the field found that brands invested just £814 million in online performance marketing last year, meaning that for every £1 spent, they added £11 to their revenues.
In the case of OPM, businesses pay only when a direct action takes place, such as a purchase (affiliate marketing) or submitting contract details (lead generation) as a result of an advertisement. The researchers estimated that OPM advertising spend had surged by 57% over the past four years, fuelled by a 136% spike in lead generation expenditure and a 50% jump in affiliate marketing spend.
According to the research, OPM is responsible for between 5% and 6% of online retail sales. As a result of affiliate marketing, in particular, Britons made some 100 million direct transactions worth £8 billion and filed about 70 million enquiries, representing indirect transactions, making for £1 billion in lead-generated sales.
The finance industry was the top OPM spender last year, with insurance and credit card advertisers pushing its share in the field to 45% of total OPM spend. Retailers, particularly clothing & accessories and electrical and computing brands, came second in terms of OPM expenditures with a 20% share, followed by telecoms and media, travel and leisure and gaming.