Why affiliate marketing is a growing opportunity for advertisers

A report finds over 80% of advertisers are devoting at least 10% of their marketing budgets to the strategy

Affiliate marketing is a growing opportunity for advertisers, but is it right for you? 

A new report finds that the perception around affiliate marketing is shifting  and advertisers and publishers alike are seeing new value in the strategy. 

To better understand the state of affiliate marketing, Rakuten Marketing commissioned Forrester Consulting to conduct research on affiliate marketing. The result was the “Networks Help Drive Affiliate Marketing Into the Mainstream” report, which found that the market for affiliate marketing is expected to increase from $4.2 billion in 2015 to $6.8 billion in 2020.

The report found:

  • A high level of interest in affiliate programs: More than 80% of advertisers and 84% of publishers surveyed ran an affiliate program, and more than 80% of advertisers devoted 10% of their marketing budget to affiliate marketing.
  • Affiliate marketing was part of the entire buying process: 83% of surveyed marketers targeted consumer during the discovery and awareness phase, 79% during conversion or purchase, and 79% used affiliate marketing to create ongoing customer engagement.
  • Marketers are measuring the success of affiliate programs: 80% of surveyed marketers tracked desktop and mobile sales, 66% tracked catalog-driven sales, and 57% tracked brick-and-mortar sales.
  • Advertisers use affiliate marketing to develop relationships: 83% use affiliate network dashboards to recruit partners and 79% attend event hosted by affiliate networks. More than half of publishers use network-provided platforms to manage affiliate efforts.

“The way consumers discover and take in information has shifted drastically over the years, while their level of sophistication and expectation toward advertisements has increased," Adam Weiss, general manager and senior vice president of Rakuten Affiliate Network, told Marketing Dive in an interview. "Presenting content that drives real value in a trustworthy way can be a significant challenge for brands and content creators, but this challenge can be solved with a smart affiliate marketing strategy.”

Affiliate programs are becoming part of content marketing

Content marketing is a key component of any digital marketing strategy, and affiliate programs are one way marketers are meeting the challenge of creating content that drives real value for customers and delivering it in a trustworthy way. A large part of this is the perception of affiliate programs getting away from direct response and couponing, and being seen more as a way that advertisers can get information out to consumers in a relevant environment.

In the report, an unnamed vice president of sales at a U.S. online publisher explained the new mindset toward affiliate programs: “The biggest positive change I’ve seen has been the change of perception around affiliate, from spammy, bottom-feeder sites to ones like ours, where we’re focused on a great user experience. Two years ago, a CMO wouldn’t go to his board and say, ‘We’re doing great in affiliate!’ but now they see [it delivering].”

Illustrating the value of the programs, almost 90% of marketers surveyed in the report said that affiliate marketing was important or very important to their overall marketing strategy.

One aspect of affiliate programs that can be attractive for advertisers is that most costs associated with affiliate marketing are paid out on a performance basis, including placement, commissions, network fees, and paid bonuses.

Conclusions 

The Rakuten and Forrester report came away with three takeaways about the state of affiliate marketing:

  1. Affiliate marketing is an important tool for both advertisers and publishers. A key reason for this is the rise of content marketing as a major aspect of digital marketing. The value of affiliate programs can be seen in the data point that more than 80% of advertisers and publishers alike are tapping into affiliate marketing. Marketers do so in order to find differentiated marketing content, and publishers to drive ad revenue on their websites.
  2. Affiliate networks play an important role in affiliate marketing programs. Affiliate marketing has become more sophisticated and complex, and because of that advertisers and publishers are turning to affiliate networks to manage their programs. Networks help advertisers find new affiliate partners as well as help plan, execute and measure affiliate programs.
  3. Improving measurement is important to unlocking affiliate program potential. Although advertisers are using forecasting and marketing mix tools to analyze and optimize affiliate programs, the study found fewer are making use of advanced attribution tools that provide a multi-channel view into the impact of their affiliate programs.

The report offered marketers a final thought on the state of affiliate marketing: “Affiliate marketing, once regarded more as a tool to drive consumers to the purchase event, is now viewed as a powerful channel for consumer discovery that leads to brand engagement and incremental sales at compelling ROIs. Advertisers are increasingly relying on the affiliate channel to broaden their brand exposure with relevant context. More publishers are taking the opportunity to complement their revenue with advertiser support that delights their readers.”


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