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The State of Affiliate Marketing, and What It Means for Marketers

The State of Affiliate Marketing, and What It Means for Marketers

Hanna Fritzinger, Head of Marketing at VigLink discusses the findings of a survey they conducted which takes a look at the current state of affiliate marketing and provides tips on how best to capitalize on current affiliate marketing campaigns

The ad tech industry is amidst a major transformation due to ad blocker momentum and regulations on native advertising usage.

While many ad tech companies are fixated on these issues that are plaguing their industry, affiliate marketing providers have been carving out a larger piece of the digital advertising pie. VigLink conducted a survey of 500 publishers and 100 merchants that currently use an affiliate marketing program to get a better understanding of just how much of that pie affiliate services take up. The survey also explored the current industry sentiment and expectations for the future. The results showcase how well affiliate services have been performing, and how publishers and merchants plan to increase their usage and spending over the next few years.

Publishers: Affiliate Marketing Brings in More Revenue than Display

Display advertising has been the heavyweight champion for publishers’ online revenue generation, until now. Survey results showcased that publishers ranked affiliate marketing ahead of display advertising in revenue generation capabilities, and came in second only to Google AdSense among all other options. When looking at large publishers only (100k+ UMV), the majority of their revenue still comes from display (ranked first) and then Google AdSense (second), with affiliate marketing coming in third.

Publishers Not as Satisfied as Merchants with Affiliate Marketing Revenue Results

The survey uncovered that publishers (64% of whose expectations weren’t met with the revenue generated by affiliate marketing programs), have still decided to increase or keep affiliate marketing budgets the same in the future. Merchants were much more satisfied with results, though, with 73% stating the revenue generated met their expectations and 85% stating their affiliate marketing budgets increased or stayed the same from 2015 to 2016. Most merchants (65%) said affiliate marketing accounts for 5%-20% of their revenue, most of which is highly incremental.

Bigger Budgets and More Revenue On the Horizon

Despite varied responses from publishers versus merchants on if expectations were met, both recognize the value of affiliate marketing, particularly considering hurdles in the form of ad blockers, content quality preferences, and uninterrupted online content. A favorable 86% of publishers expect their affiliate marketing revenue to increase or stay consistent in the future, and a staggering 91% of merchants plan to increase or keep affiliate marketing budgets the same in the future. While these are positive anticipations for affiliate marketing, it’s important to understand that many publishers and merchants are still relatively new to the affiliate industry . As they continue to use affiliate marketing programs, they’ll likely refine and optimize their usage for higher performance.

Positive Experiences Outweigh Mixed Feelings

There were mixed results from both merchants and publishers regarding affiliate marketing features and inherent characteristics of the technology. A large part of the unease for merchants has originated from a lack of insight into where their brands are being promoted. The affiliate marketing industry has rapidly evolved to address these issues with the advent of 3rd party compliance services to help with detection as well as improved reporting options supplied by networks, sub-affiliate partners, and publishers. Merchants can now request comprehensive reporting showing where traffic originates. They also have the ability to tailor their affiliate base by filtering publishers by region, promotional method, or site, giving them greater control over who is able to earn with their brands.

As to how affiliate marketing could better serve publishers, 30% of publishers don’t think there are enough products that interest their readers and 20% think it’s too complicated to manage. However, it’s likely that merchants will continue to expand or open affiliate programs (due to the incremental revenue driven), resulting in more product coverage from publishers. Additionally, as more people become familiar with different affiliate solutions that take care of the technical aspect (hard coding links), campaign management will scale much more easily.

What Marketers Can Do With This Information

Armed with this knowledge, there are a number of ways marketers can capitalize on their affiliate programs. By increasing commission rates there is a much higher chance that publishers will incorporate links to your storefront within their content. The best part? You only pay if the traffic converts, which brings down both cost and risk. Additionally, joining multiple affiliate networks gives a brand maximum exposure amongst different publishers . When a publisher is interested in joining your affiliate program, many will turn to your website as their first stop for more information. Then, by creating a dedicated landing page, you can make it easier for publishers to find what they’re looking for when considering affiliate programs in which to participate. Doing so will also help boost SEO, which means more page views.

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