Tim Nilsson, VP global affiliate management at Zanox UK network
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With new affiliate networks launching left, right and centre, the more mature internet economies of Scandinavia, UK, the US and Canada are now exceeding the ratio of one network per million people. Nadeem Azam speaks to zanox’s charismatic Vice President of Publisher Management Tim Nilsson about this and other trends in the affiliate and online marketing sphere.

Born and raised in Sweden, Nilsson has worked in Germany, Scandinavia, Spain, the US and UK as an E-business consultant, online advertiser and entrepreneur. He has been working for zanox for around three years.

Tim, what trends do you think we will witness in terms of affiliate networks in Europe and North America over the coming months and years?

The competition is fierce and mid-tier players have seen their business models stagnate. Therefore they need to look beyond their home markets. For this they often don’t have the infrastructure and the staff, so their only option is to acquire other networks.

Do you think this will cause issues for zanox in your core European markets?

No. We have spent years building our infrastructure and presence in countries like Germany. People underestimate the value of experience and know-how. So, although there will be more players on the European continent, I am confident that zanox will remain a leading light.

How is the global roll-out of affiliate networks unfolding? What patterns have you witnessed?

American networks are not heading to continental Europe. What they are doing is coming to the UK first and hoping that will become a launchpad for the rest of Europe.

What British networks are and will be doing is expanding into the more mature European economies such as Germany and France.

The chain is continuing with continental European networks exploring options in less developed countries.

There are over 300 networks of varying sizes in the United States and, on Azam Marketing’s database, 51 in the United Kingdom. Will they all be around in a few year’s time?

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Of the 300+ in America and the ones in the UK, few will remain in their current form. Only the fittest affiliate networks will survive.

What will become of them?

Everybody is predicting major consolidation in the marketplace. There are some networks which are desperate to sell.

Others will partner with companies in other countries. They may seek to enter those countries themselves. However, they may find the raisons have been picked.

Others will close down.

What will determine who the winners and losers are?

A number of factors will separate the wheat from the chaff. The first and foremost is the quality of the management. They will have to know the business inside out and be aware of online marketing best practices.

Low cost labour and healthy margins will also be critical. For this reason you may find networks running operations from centralised locations which have multicultural and multilingual staff. So, despite being based in a country other than the one they are serving, the staff will have a good knowledge of the market there. Of course, it will be necessary to have people on the ground in those countries to meet clients.

How else will affiliate networks need to evolve to survive?

It will be necessary for affiliate networks to expand into other avenues. I see rigidity with many of them and that is not a healthy thing.

At the end of the day it is about grabbing as much traffic as you can. Affiliate and search marketing are only two of many means. Google is tightening the reigns and networks are going to have to expolore other avenues to acquire traffic.

Recommended Links:

Zanox UK – Join fast-growing affiliate network with quality campaigns

Portals: Trends and Developments – Tim Nilsson’s presentation in Barcelona in October 2007

Zanox New Year Party – lowdown on affiliate marketing gathering, including pictures of Nilsson

Coming Soon: an insight into Azam Marketing’s newest staff member, Sinead Hernen, the new Senior Affiliate Manager