• by Gavin O'Malley  @mp_gavin, March 28, 2005

For all the hype about affiliate marketing, is it effective? A new study by Shawn Collins Consulting suggests that affiliate programs can lead to business, with 14 percent of affiliates generating conversion rates of more than 5 percent.

For the study, more than 130 affiliate managers--ranging from small mom-and-pops to Fortune 100 companies--were surveyed on their overall strategies, as well as a number of issues about their affiliate marketing channels such as staffing, recruiting, and management.

About one in seven affiliate marketers--14 percent--reported that conversion rates on such programs were greater than 5 percent, according to the study. An additional 10 percent reported rates of between 3.1 and 5 percent, while 13 percent reported conversion rates of 2.1 to 3 percent.

One out of four marketers with affiliate marketing programs report that recruiting new affiliates is their biggest challenge. One out of four respondents also said that e-mail is their most effective recruiting technique, but 18 percent preferred the old-fashioned telephone, while 14 percent considered advertising in affiliate program directories to be their best bet.

The majority--59 percent--said they do allow their affiliates to bid on their trademark names in pay-per-click search engines; 28 percent still do; while 9 percent did not know. Sixty-nine percent said they do not permit adware affiliates into their affiliate programs; 19 percent do; while 12 percent said they do not know.