The promise of riches reaped from your armchair are generally to be found on dodgy-looking flyers taped to lampposts. However, a number of websites are offering the chance to make a healthy living without stirring over the doorstep, and record numbers of students defeated by a moribund jobs market, are turning to them for income. And for those who put the hours in, the rewards are enticingly real.
The key is affiliated marketing, an industry born in the late 90s. A third party, or affiliate, acts as part of a virtual sales team by placing ads and links on their website, which will direct visitors to the home page of an established retailer. Every time that visitor goes on to make a purchase, or another specified transaction, the third party receives a commission.
It may sound too simple to be true, but Helen Southgate, senior online marketing manager at BSkyB and the Internet Advertising Bureau‘s (IAB) affiliate marketing council chair, is keen to allay the fears of those suspicious of web-based income schemes. “Affiliate marketing is an excellent way to generate an income from online advertising, regardless of the size of your business,” she says. “It has been growing in stature and is highly regarded by key advertisers from large blue chip companies to SMEs.”
MoreNiche, an affiliated marketing company that allows third parties to sign up for free, and whose member retailers pay commissions of up to 40% a sale, has seen a 26% increase in the number of graduates using its services to set up online businesses after failing to find employment. However, its director, Andrew Slack, fears many of them are destined for disappointment.
MoreNiche’s highest earning affiliate is pulling in £3m a year, but Slack says the uninitiated regard the internet as a licence to print money.
“It is possible to make £50 a week by just letting the ads sit there on your Facebook page, but it’s not a get rich quick scheme,” he says. “Making good money requires a high level of commitment and hard work. During the set up period, people can be easily working a 12-hour day, seven days a week.”
The glory of the system is that members can fit their time round a degree course or a job, and that no capital is required to get started. MoreNiche offers new members free websites and tutorials on marketing, editing and copywriting, and they are assigned a member of staff as a mentor who will give extra advice on call.
It is in MoreNiche’s interest to make sure its new recruits are as savvy as possible, as it earns commission from its member merchants each time a referral results from an affiliate site.
Slack set up the business after earning £40,000 from affiliate marketing through US websites while studying computer science at Aberystwyth University. Seven years on, it has an annual gross turnover of £2.5m and specialises in marketing health and beauty products.
Others among the 20 or so affiliate marketing companies in the UK provide less initial hand-holding for novices, but have bigger, more lucrative brands in their stable and a wider range of specialisms. The largest independent network, Affiliate Window, offers high street brands ranging from fashion to electronics, and members can choose niche specialisms within each category. An on-screen dashboard allows them to see which retailers generate the most business from their affiliates.
Senior partner Mark Frost recommends that those hoping to earn their living from affiliate marketing sign up to several networks at once to increase their range – provided the networks are regulated members of the IAB. “It is worth researching the range of merchants and commissions and using our online dashboard,” he says.
Robert Parker, 25, from Leeds joined MoreNiche in 2004 after failing to find work as a fitness instructor. He began by placing ads on his blog and now makes £40,000 for a 20-hour week promoting health and beauty products across his 15 websites. “The first six months is hard – I didn’t know what I was doing and was making about £200 a month,” he says. “But you have to regard it as a business and, in a year, once you’ve put in the time marketing your website, mastering search engine rankings and adapting your content, you can give up the day job.”