The outlook for Affiliate Marketing
While COVID-19 is turning our everyday lives upside down and of course it is imposing significant operational constraints, other developments show the opportunities of affiliate marketing in these uncertain times. As an example Tradedoubler has been able to attract many new publishers in these times who normally work with branding campaigns. While these have been hit quite hard by the crisis, affiliate marketing is probably the least affected by the impact. Consequently, an opportunity that needs to be taken up!
We talked to our CEO Matthias Stadelmeyer, about Affiliate Marketing and the opportunities amidst the COVID-19 Situation.
History of Affiliate Marketing
Affiliate marketing looks back on a history of over 20 years and is, therefore, one of the oldest digital marketing disciplines. Affiliate marketing networks consist of thousands of websites of different types and have always been an incubator for new ideas and accelerator of new developments. For advertisers, affiliate marketing networks offer a large mix of different traffic sources, for websites the possibility to monetize their advertising inventory.
In the early days of affiliate marketing, all other digital marketing disciplines were an integral part of affiliate networks, including SEM and SEO and all types of display advertising. Some of these disciplines have developed into independent advertising channels, others have been added over the years.
For example, retargeting via affiliate networks has emerged as well as cashback, loyalty, voucher portals and innovative publishers offering technology solutions such as click-out technologies for advertisers. Influencer marketing is a relatively new advertising discipline that is growing rapidly via affiliate marketing networks.
The opportunities that affiliate marketing has to offer
Affiliate networks today offer a wide range of different traffic sources that would otherwise be difficult for advertisers to access. While other major digital marketing disciplines are tied to a dominant market leader, such as search engine marketing on Google and social marketing on Facebook, affiliate marketing is constantly changing and offering new and creative approaches to how advertisers can reach their target groups.
In a survey of advertisers who work with Tradedoubler, two-thirds of all advertisers said that they see greater growth opportunities in affiliate marketing than in other digital marketing disciplines, as these are largely exhausted and optimized to the end, while affiliate marketing constantly offers new opportunities.
The reason for the positive general mood is not only the traffic mix but also the technical skills of the affiliate marketing industry as a whole. Since affiliate marketing is always dependent on success in the form of conversion (sale or lead), we do not only measure impressions and clicks but the entire user journey up to the check-out.
All this data is processed and made available transparently to advertisers and used to optimize their advertising measures and adjustments in the affiliate program.
Essentially, all relevant affiliate networks have been working transparently for years, which means that the advertiser always has access to all information of his affiliate program: partners, contact persons of these partners and all traffic key figures and these are usually also available in real-time.
Technology and innovation
Technology has been a big issue lately, especially concerning cookie tracking and data protection. In the affiliate industry itself much less so than around the industry. This is because affiliate marketing networks have been setting standards with innovative tracking methods for years and are therefore not affected by changes on the browser or regulatory side, as we have been following these standards for years. This also applies to data protection. Tradedoubler does not store any personal data with affiliate programs.
New innovations are often demanded in the industry or by the industry. In my view, this is an artificially created issue for two reasons. Affiliate marketing is constantly evolving and many of today’s topics, especially on the technological side, are driven by affiliate networks, such as tracking, data management, and user journey reporting. And then Affiliate Marketing has grown up: In a mature and developed market, innovation inevitably becomes smaller as breakthrough innovations explore new markets.
The positive outlook for our industry is not only based on these statements but can also be substantiated with figures. The large networks had about 10% sales growth last year. Since networks are growing less than their customers and partners due to competitive pressure and falling prices in affiliate marketing, it can be assumed that affiliate marketing as a whole will grow significantly faster than the overall digital marketing market. In 2019 Tradedoubler was able to increase its customers’ shopping basket sales via affiliate marketing by more than 20%.
The current Corona crisis further confirms this view. Many media companies are now also working via affiliate networks, as other advertising measures that are not measured by actual success are now being cut back. Even inventory that moved to Programmatic years ago is gradually coming back – because affiliate networks achieve sustainable results transparently and innovatively.