Affiliate Marketing Market Trends 2017 – The Modern Marketplace

The modern marketplace is a place where consumers can shop anywhere, at any time, using multiple devices as long as they have an internet connection. This creates a range of challenges and obstacles for marketers such as how to be in the right place, with the right offer, to the right audience, at the right time. Affiliate Marketing provides a viable solution to many of these new challenges and obstacles.

Forrester Consulting conducted a survey on the perception and effectiveness of affiliate marketing programs in 2016. The results showed that nearly 90 percent of advertisers said that affiliate programs were important or very important to their overall marketing strategy. The majority of publishers revealed that affiliate partnerships drove more than 20 percent of annual revenue.

Key findings:

  • Advertiser and Publisher Investment is High;
  • A Full-Funnel Strategy;
  • Measurement is Improving; and
  • Relationships are Key.

In the U.S., advertisers are leveraging Affiliate Marketing for three key areas throughout the conversion funnel:

  1. Discovery and awareness;
  2. Conversion or purchase; and
  3. Ongoing customer engagement.

Discovery and Awareness

Advertisers are leveraging their Affiliate Programs to promote brand awareness, capturing the attention of the audiences whilst still in their discovery phase, across a wide variety of devices and platforms. Content marketing sites including social media, with Facebook, Instagram and Snapchat, are the current primary media channels being utilised. Affiliate Marketing allows brands to spread valuable word of mouth advertising for their brand.

Conversion or Purchase

Consumers today are more technology savvy and much more commercially aware than prior generations Consumers do a significant amount of research online before making a purchase either in an online or offline store. In the U.S. market some of the largest and most successful publishers offer coupon codes and deal sites, to provide the final incentive for a conversion to happen. A robust Affiliate Program takes this into consideration and utilises a wide range of publishing models (i.e. mobile, blog posts, video, chats, press releases, forums) to make the conversion happen.

Ongoing customer engagement

Traditional advertisers are leveraging Cash-back, Loyalty, and Reward Programs as a means to maintain ongoing customer loyalty and engagement. This can have a negative effect and cheapen their brand in the mind of the consumer. Aside from providing great product and service, marketers need to consider the ‘Why’ – Why should a consumer continue to interact with their brand? Affiliate Marketers on the other hand are aware of the ‘why’ and are moving to content marketing to ‘Lead With Value’ and providing the consumer with enormous value up front before making any kind of offer. This builds loyalty to the brand in the long term rather than the traditional one-off transaction.

Affiliate Networks

As Affiliate Marketing continues to evolve, so too do the Affiliate Networks that support the market. Affiliate Networks are the middle men of Affiliate Marketing, they act as a trusted advisor to both publishers and advertisers alike. Affiliate networks are required to provide insight and thought leadership on how both parties can leverage every stage of the consumer journey. The largest of these are Clickbank, Commission Junction and JVZoo.

Rise of the Social Media Influencer

Social Media Influencers are on the rise, a recent U.K. study has shown that over a quarter (27%) of parents will purchase an item of clothing for their children after seeing a celebrity child wearing it. Influencers are leveraging social media platforms such as Facebook, Instagram, and Snapchat to connect with consumers and are achieving high engagement rates. Partnering with influencers, (not necessarily only mainstream celebrities), who work across the Affiliate Industry, provides brands with the ability to optimise their affiliate program performance and increase their audience reach.

Mobile Matters

Mobile is on the rise also, Smartphone adaptation globally continues to increase, seeing a year-on-year growth rate of 21% in 2016 (admittedly a decease versus 31% increase in 2015), and mobile innovation and commerce shows no signs of decline. In fact mobile advertising spend in the U.S. grew 66% in 2015, whilst desktop grew only 5%. Asian markets are the fastest growing and have the most mobile workforce on the planet. Messenger apps such as WeChat and Kakao talk are the largest mobile platforms being utilised by Asian consumers. Asia has 1.2 billion mobile gamers and controls 55% of the $24.9 billion in worldwide mobile games revenue. The “Big Three” of China, Japan and South Korea currently control 90% of the region’s mobile earnings.

Video Marketing Dominates

US digital video ad spending will see double-digit growth annually through 2020. By contrast, TV ad spending will grow much more modestly, at rates ranging from 2.0% to 2.5%. Still, TV will remain dominant, with total ad spending reaching $77.17 billion in 2020, more than quadruple the $16.69 billion for digital video. Affiliate programs are utilising video ads, short video product summaries and reviews, and influencers are utilising vlogging more and more as a means of engaging consumers.

The Australian Market

The Australian digital advertising and marketing ecosystem is growing and Affiliate Marketing is a key part of the value chain. Whilst still in its infancy the Australian Affiliate Marketing Industry is growing at a rapid pace. Whilst there are no official Australian figures, Affiliate Marketing is a rapidly growing component of digital marketing in many foreign markets. According to the IAB U.K./PwC Online Performance Marketing Study 2015, Affiliate Marketing produced £16.5B in sales in 2015, equaling 10% of all U.K. retail ecommerce (and 1% of U.K. GDP). The same report noted that Affiliate Marketing generates a 14:1 ROI. Australian advertisers and agencies are now recognising the benefits of working with a low-risk, cost-effective channel which addresses the challenges and obstacles marketers face in the modern marketplace.

Here’s To Your Success,

Grant Cause

P.S. Now if this blog post has been of value to you (hopefully 10x the value of the time it took you to read it) and you want to get some exceptionally valuable training that reveals how to really establish yourself online without all the hype, then please Take Action here and apply to work with me. I look forward to working with you.

Sources:

  1. Interactive Advertising Bureau​ (IAB), Affiliate Marketing Handbook – 2016​;
  2. Superdata Research, games and interactive media intelligence
  3. eMarketer
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Grant Cause

A 30+ year IT professional, Grant is an entrepreneur who assists businesses, both online and offline, with their online marketing. Helping them to automate their businesses to drive more traffic, generate more leads and convert leads into Sales.