Helping companies form successful partnerships since 2004, Adam Ross is CEO of global affiliate marketing platform Awin.
In 2000, my company launched into what was effectively a cottage industry. The sector was small and nascent but packed with talented, passionate people. While today’s profession bears few similarities, the spirit of creativity and invention remains.
Now a multi-billion-dollar powerhouse, affiliate marketing is a global industry table stakes for any e-commerce business hoping for sustainable growth. At its heart is a pay-for-performance, adaptive advertising model empowering millions of consumers to make better purchasing decisions every day. Companies can use the channel to build their own advertising ecosystems, creating a galaxy of revenue drivers across almost every media touchpoint.
Using affiliate marketing, retailers can collaborate with a rising TikTok star or niche YouTube creator to promote a new campaign. Or they can work with a glossy magazine or product review site to boost their brand. Advertisers can connect with a sector-leading comparison app or cutting-edge fintech pioneer to acquire customers or reach a massive audience of savvy shoppers via cashback or coupon communities.
And all of this is achieved with little risk and very high ROI.
Factors And Forms
This diversity of possibilities is the result of a few factors. Let’s discuss two of the biggest in recent years.
First, I find that the pandemic fueled interest and investment in the channel. The performance heritage of affiliate meant when brands were hunkering down, unsure of where to invest ad spend, they sought refuge in cost-per-acquisition (CPA) campaigns. I noticed the ability for publishers to drive steady sales for retailers without cost risk was a life raft for many during this disruptive period.
Second, more publisher models recognized the benefit of affiliate and began embracing it as a valuable income stream in 2020. I’ve noticed that we are now seeing an increased merging of influencer activity as creators strike up relationships with brands relevant to their niche. Prominent media houses that shunned traditional display placements are now integrating affiliate marketing into content commerce strategies to better monetize traffic.
I see the channel is now buzzing with fintech companies that have formed novel ways of delivering tailored deals based on a user’s shopping behavior. And technology partners are providing seamless access to cutting-edge marketing tools for advertisers on a risk-free CPA basis.
According to a recent report from the Performance Marketing Association, the affiliate industry has grown by 47% between 2018 and the end of 2021, demonstrating how it has become the go-to channel for many retailers.
With this influx of new partnerships, I believe the industry has become better at measuring and rewarding their affiliates accordingly. Attribution is shifting from a blunt, last-click basis to sophisticated, multi-touch solutions. Payments don’t have to be solely fixed to CPA, either. A hybrid of cost-per-click, cost-per-lead, tenancies and other rewards can be combined to better reflect an individual partner’s value.
In making such adjustments, I’ve noticed a virtuous circle of growth is developing within the industry that points to a more expansive future.
To better understand the increasingly varied opportunities within the channel, my company studied our hundreds of thousands of active partners to determine the most innovative affiliates. Through this process, I struck upon five themes I feel characterize trends in affiliate marketing.
• Ethics matter: The importance of ethics in business has arguably never been more vital. Sustainability, inclusivity and accessibility are top of the agenda for consumers and companies alike. More businesses attempt to confront these issues in the way they operate and the services they offer.
• Affiliate means more than a coupon code: I believe the channel has always been a world full of experimenters and edge cases. That’s part of its appeal. It’s a space where startups launch, test ideas and receive real-time feedback. Alongside established methods like coupon codes and cashback, you can now find fintech apps, influencer marketing platforms, connected commerce solutions, on-site optimization solutions and more.
• Innovation without risk is possible: Many businesses today face the daunting prospect of having to keep up with tech’s warp-speed progress. To do so normally involves huge investments of capital and time in developing tech in-house or acquiring and assimilating it into your existing stack. I believe the new stream of opportunities technology partners afford brands in affiliate is a perfect example of how to adopt cutting-edge marketing technology at speed and via a commercial model that insulates you from the risk of experimentation.
• Local doesn’t mean ineffective: Don’t let size fool you. There are many affiliates that might be considered a small fish in a big pond but also considered a regional powerhouse in their subject authority. In my opinion, they epitomize that holy grail of quality content allied to high conversions, often with the bonus of an incentive. And they represent the bedrock of affiliate programs across the world.
• You don’t need to be a big business to go big: For advertisers seeking scale, don’t discount the mainstays of the affiliate channel. Their success in one area of digital marketing has, through investment or strategic acquisition, established similar expertise in other areas. Many global publishers act as multi-disciplinary, multi-region specialists, aiding brands in their desire to reach international audiences across a spectrum of digital touchpoints.
There are no rules—your affiliate partners, campaigns and strategies can be unique to you and produce impressive results. That’s because, in partner marketing, you pay for results.
I find that today’s affiliate marketing has been decentralized and democratized, and any company can participate. As the ad says, this is not your father’s vehicle, nor is it your mother’s. Our partner marketing belongs to the new generation of marketers driving their companies further than ever thought possible.