Affiliate Marketing In the Dark

Today, I'm at the Casino Affiliate Conference in Las Vegas. In fact, I'm writing this article from the show floor, standing by our Email Analyst booth. It has been interesting in many ways, but the chief takeaway from me is just how little these casino brands (and I'm sure almost all brands) know about the affiliate traffic they receive, and how much of it comes from e-mail.

Yesterday I gave a speech on the importance of e-mail in affiliate marketing. I was able to clearly show the direct correlation between e-mail sends and Web site traffic. An e-mail goes out, and site traffic increases. E-mails stop going out, and Web site traffic drops. In one case, we were able to demonstrate that over the last 3 months, one particular casino brand's Web site traffic dropped 75 percent in a one-month period at the exact same time their e-mail efforts curtailed. They began a program of stand-alone e-mails toward the beginning of August, and there was a return of traffic to within 25 percent of the highest peak before dropping their e-mail campaign.

I was also able to demonstrate that the smaller the marketing budget of a particular brand, the more important e-mail was to their overall strategy. For sites with little traffic, what traffic they had lived and died by their e-mail sends.

I also reminded them of the DMA 2004 ROI study that showed that e-mail had the second-highest ROI of any Direct Marketing channel (only being beaten by Telemarketing), and imparted the information I had been told by Matt Blumberg, CEO of Return Path--that one of their clients came in to report to their team that while they received an 8-to-1 return on search engine marketing, their e-mail efforts netted them a 40-to-1 return on their investment.

The speech went over well. Today I was speaking to an affiliate who had heard my speech and had hit himself in the forehead, saying: "Why haven't I done this? Why am I not using e-mail?"

He then went to some of the top casino brands, who warned him to stay away from e-mail: Was he crazy? They never use e-mail! And yet...

We were able to show him that not only were they sending e-mails, they were sending a lot of e-mails. The ones who claimed they weren't using e-mail at all turned out to be the top senders of e-mail in our Email Analyst system. And when we compared their Alexa Web Reach Per Million numbers going to their Web site, jumps and spikes in e-mail traffic matched up directly with the e-mail drops.

I was left to conclude that for these brands, where their affiliate traffic is coming from is a mystery to them. All they know is that they are receiving traffic, but whether that traffic is coming from banner ads, e-mail, text links, or some other channel is a mystery to them. As a result, they end up disparaging the very marketing channel that is driving the most traffic to them. They are operating in the dark.

The affiliate was left scratching his head.

And I have to admit, I was left scratching my own head. How long will affiliate marketing work in a vacuum and in the dark? I wish I had the answer to that.